Buying a property is a big financial decision that often affects your quality of life and economic health in the long term.
As a prospective homeowner, it makes perfect sense to want to learn everything you can about the different options available to you.
In the Australian property market, buyers can choose to purchase either house and land packages or buy their own block of land and then build.
The option you choose will depend primarily on your unique situation. However, if you are unsure which is best for you, we have outlined some of the benefits of purchasing a house and land package so you can make a more informed decision.
Saves You Thousands of Dollars
When you purchase both a house and the land together, you only pay stamp duty on the land component of the contract if you have not commenced building yet.
Depending on the location, for a property worth half a million, you would pay a stamp duty ranging between $13,000 to $26,000. You may also need to factor in a builders clean for a new Adelaide property.
However, when purchasing a vacant lot worth $200,000, you only pay anything between $3,500 to $8,500 in stamp duty charges, saving between $10,000 and $17,500.
You may also be eligible for the First Home Owner Grant of up to $10,000 on new homes built in NSW or $20,000 for new homes in Victoria.
In addition, you save on costs of building and other miscellaneous expenses as builders offer better deals to buyers.
More Convenient
There are many moving parts when building a new home. You will need to find and purchase the perfect empty lot for your future home.
Then, there is the gruelling task of interviewing builders and reviewing tens of tenders to hire a contractor.
Let us not mention the bureaucratic bottleneck you may run into while processing all the building permits required by law.
And, then there are the tradespeople to deal with. The bottom line, it is stressful to custom build your home.
On the other hand, with a house and land package, all the processes that go into building a home will be handled for you.
When you purchase a house and land package, you only need to focus on securing the necessary financing without the additional concerns of overseeing the day to day project.
Streamlined Process, Quick Turnaround
The house and land package offers a streamlined process since you will be working with one team from start to finish.
The package often comes with a ready-made house plan that is designed to suit the block, so you can quickly progress to the next phase.
While builders may offer you pre-designed plans such as split level home designs, you can choose a custom design as well as the range of fittings, composite timbers for decking, Newcastle blinds and outdoor areas as well as any other building materials that fit within your building budget.
Also, most builders have their team of designers and architects, which makes coordinating between construction and design seamless.
You Will Know the Total Cost Upfront
You get transparent pricing and an idea of the total cost to build your home. Thich is an added advantage for someone on a tight budget or when you already have pre-approved financing.
However, we recommend that you ask your builder for a detailed breakdown of the inclusions, designs, and features the price covers.
An Affordable Way to Get on the Property Ladder
It costs 14% less on average to purchase a house and land package than paying for an established property in the same area.
Also, when you factor in the lowered stamp duty, federal and state government incentives for new homeowners, and enticing deals from builders, purchasing a house and land package offers an affordable option for young people to get onto the property ownership ladder.
Offers Significant Tax Benefits to Property Investors
As a property investor, a house and land package offers some incredible value you may not get otherwise.
For example, new houses depreciate fast, which means you can claim full depreciation on your investment.
Also, since the home is new, it will have a warranty should there be any problems.
Finally, new houses are low maintenance and often come fitted with the latest energy compliance features, which will save you huge energy costs in the long term.