Home and land packages and duplex construction

As the property market continually increases, Home and Land packages have become increasingly popular. As investors look to grow their property portfolio, one aspect that has gained popularity recently is a home and land package which involves a duplex construction. In this article, we look at the advantages that home and land packages offer (especially in a duplex construction scenario) as well as the important key items to look out for. 


What is a Home and Land package?

Home and Land packages can be structured in two key ways. 

The first is to acquire land and be able to take part in the building process. This requires active involvement from you (or your buyer’s agent / property advisor) as you will need to “shop around” for a suitable builder. 

The second is an already packaged home and land project where you will simply get a finished product at the end. The person who put together the package does all the hard work of finding the builder (or builds it themselves as developer). In some scenarios this could be arranged by a referrer / introducer. 


What are the differences between the two? 

In the first scenario, the builder that you select will need to carefully examine the land contract and make sure that any build price or tender includes the costs of complying with all restrictions noted on title and any further developer restrictions. If this is not carefully considered, you could be up for an unpleasant surprise when the builder issues a contract variation which increases the build price to reflect the additional costs of complying with the restrictions. Stamp duty is paid on the land, and following settlement of the land contract, construction can commence. Therefore, this offers tax advantages in that you only pay stamp duty on the land component. 

In the second scenario, referred to as the ‘turnkey’ package, you are acquiring an already developed home for a fixed price for both the land and the construction, ready for you to settle and move into. The opportunity to own land and have a built-in home makes this a more favorable decision for first home buyers as it requires less involvement however it comes at a cost. Stamp duty is payable on the full Turnkey price (as you will be getting a finished product) which would typically be higher.  


What grants are available? And who is eligible to use them?

There are various grants available for home and land packages. Your eligibility for these grants will largely depend on whether it’s your first purchase, whether your spouse or partner has owned property before, which state you are in, your construction/package price etc. 


What should I look out for? 

It is very important that you obtain appropriate advice when considering a home and land package in order to avoid any unexpected surprises. 

  1. Talk to your lender – depending on how the package is structured, lending criteria and amounts could vary. For example, your lender may be more likely to lend you money if your home and land package is structured as per the first scenario. Therefore, your options may be limited to this scenario. 
  2. Markup – depending on who you have engaged to present you with the proposed purchase investment opportunity, the second scenario may be a more costly process. Typically, the buyers’ agents / property advisors’ fees or developers’ markups may already be added to the cost of such packages. You should therefore make sure you exercise your own due diligence and research as to what such a package should be selling for (as compared to the price you have been offered to acquire) and obtain comparable sales data in the area. 
  3. Construction terms – You should have the build contract carefully reviewed to make sure your interests are protected. This means making sure that your defects liability period is negotiated, that a final certificate of occupancy is obtained before you make your final payment, and that that progress payments are in line with industry standard (if applicable). Further terms should also be negotiated subject to the exact nature of your proposed dwelling. 
  4. Taxation advice – if you are constructing a property i.e a duplex with the intention of selling, it is crucial that you obtain independent advice from an accountant. You will most likely need to pay GST on the sale (and due to recent regulations, this will need to be withheld by the buyer from sale proceeds) and potential capital gains tax liability.  

If you are a first home buyer or wanting to increase your investment portfolio, home and land packages offer a great opportunity for you to step into the market. We strongly recommend that you have your contracts reviewed by a qualified solicitor. Feel free to contact Klevis Kllogjri or James Hatzopoulos who have assisted numerous clients with home and land package acquisitions. Contact us through our website, at [email protected] or at 02 9307 8900 for an initial discussion if you are considering a home and land package.


The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog published. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.


Share Article:

Related Articles

April 11, 2024 |

April 11, 2024 |

March 3, 2022 | ,

Stay up to date with our latest articles