How do home and land packages work?

December 29, 2020
Buying house and land packages in Sydney is no small feat. It takes months of planning and coordinating to secure a suitable plot of land and build a new house.
To give you a better idea of how it usually happens, here’s a step-by-step breakdown of how house and land packages work.

Step 1: Evaluate your budget and goals.

Deciding to build a home is no small feat. In short, you’ll want to ensure that you have a plan for both your budget and goals with the project.

You might ask yourself questions like:

  • Do I want to build a forever home?
  • Am I aiming to build a starter home to convert into an investment property later?
  • Would I build a duplex where I live on one side and rent out the other?

All of the potential options you might choose present different budgets, financial approaches and specifications when it comes to your house and land packages. Therefore, clarifying not only your budget but your overall goals is always the first step.

Step 2: Choose your land.

The first step towards closing on your house and land package is choosing your plot of land. Your options for land sizes range between small, medium and masterplan.

You don’t have to worry about the actual sizes too much because really, you want to stick with your budget, what’s available and what you actually need. Buyer’s agents can help you decide on the best plot of land on which you’ll build your property.

Step 3: Complete two purchases.

The next step towards securing a house and land package involves two separate purchases. You’ll buy the land from a land developer and you’ll buy the house from a builder. But don’t be too alarmed because the two purchases usually come bundled together - hence it’s called a package.

Buyer’s agents can help you with both purchases and it’s highly encouraged that you work with a buyer’s agent throughout this process. They’ll do all the heavy lifting from the negotiations to dealing with third parties to explaining the contracts.

You’ll need two types of loans in order to close on house and land packages in Sydney (unless you’re paying in cash). These two loans include a Vacant Land Loan (or a Land Mortgage) and a Construction Loan. Usually your bank will also package these together into one.

Vacant Land Loan

A Vacant Land Loan is the first loan you’ll make repayments on. Since you’ll be purchasing vacant land, you’ll only need to pay stamp duty on that land, and not on the house which you’ll plan to build.

You can also check with your lender to see if you’re eligible for a complete stamp duty exception. In most cases, this is allowed for first-time home buyers.

Construction Loan

A Construction Loan is a loan you’ll take out to pay your builder. Since it takes six months to a year to complete a newly built home, these loans are often quite reasonable because you’ll only pay interest on the money as it gets sent to your builder.

In other words, your builder will work on your home step by step. Therefore, the bank only pays your builder step by step and you’ll only pay interest step by step.


The general breakdown is as follows:


1. Preconstruction fees and deposit = 5%

2. Slab = 15%

3. Frames = 20%

4. External Walls = 15%

5. Internal Linings = 15%

6. Fix Out = 20%

7. Completion = 15%


We’ll go into more detail about the stages of your build later, but this is a standard breakdown in terms of how your Construction Loan is likely to be split.

Step 4: Start building your home.

Finally, once you’ve decided on a plot of land and taken out the appropriate loans, your builder will start construction. This stage can feel like a long wait as the length of a project often depends on suppliers which is certainly a consideration to make in light of any lockdowns or unforeseen circumstances.

After the planning portion of building a home is complete, the five stages of building a home can begin: slab, frames, external walls, internal linings, fix out and completion.  


In this first stage, your house will be given a solid foundation (or base) on which the rest of the home is built. At this stage, the land will be made suitable for building as well as changes to anything underground that could be in the way.


Next, the frame of your home will begin to take shape. It’s exactly what it sounds like where the basic skeleton of your home goes up.

External Walls

At this stage, your new home will be enclosed which can be an exciting part of house and land packages. It’s the point where you’ll have walls, windows, a roof and it’ll actually start to look like the real thing, at least from the outside.

Internal Linings

This is the stage where you’ll start to see drywall and more of the internal shape of the home come together. It’s also when the electrical and plumbing gets taken care of.

Fix Out

The fix out stage of house and land packages is where all the insides will come together. Flooring, appliances, and built-ins will start to be assembled in the home.


Finally, the completion stage is when all the smaller details come into play that will bring the home together. Essentially, all that’s left to do is pass the final inspection.

Again, house and land packages can take up to year to complete, sometimes longer. But, if you take the process step by step, it’s incredibly exciting to see the blueprint come to life.

If you have questions about house and land packages in Sydney, feel free to contact Wealth 360° for more information.

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