There’s nothing like a brand-new home, and you could be eligible for a slew of financial advantages if you buy or build one right now. Australians have also taken advantage of them — the number of loans for constructing new homes has increased by 94% year on year!
If you want a brand new home, a house and land combination can be a convenient and economical solution. We break out the benefits and drawbacks so you can make an informed decision.
House And Land Package
A house and land package has two kinds. A ‘turnkey’ package often includes a newly constructed home on a specific lot ready to move into after the buyer turns the door key. At the same time, a home and land package allows you to acquire vacant property first and then build a home from a set of builders and designs.
Both of these solutions could be a highly cost-effective way to experience the advantages of a new house. As a rough approximation, huge 500-square-meter lots in Sydney’s southwest start at under $490,000, with house packages beginning at roughly $300,000.
Even though the house and land are at $790,000, it is still $396,518 less than Sydney’s typical house value of $1,186,518.
You may qualify for other savings too. Buying land first and building later provides redemptions on stamp duty, as duty is only charged on the value of the land. Furthermore, financial aid like the First Home Owner Grant is usually only obtainable for recently built homes.
House And Land Packages For A First-Time Home Buyer
If you’re a first-time home buyer wanting to acquire land to build your home on, the Government’s First Home Loan Deposit Scheme (New Homes) Guarantee may allow you to buy a modest home with as little as a 5% deposit.
You may be able to apply for one of the 10,000 spots in the plan if you buy a house and land package or land and a separate contract to build a home. However, you must begin construction within six months of signing the contract, complete construction within 24 months, and move into the property within six months of receiving the occupancy certificate.
Also, house and land packages by RBWA can help you find a suitable home that’s right for your needs, whether you choose a turnkey package or a home and land deal. It is possible through their extensive range of house and land package selections, so go and explore their site once you’re ready to purchase a new home.
New Home Guarantee
It isn’t easy to save up a 20% deposit for your first property. You might be wondering what government assistance is available.
The New Property Guarantee scheme allows you to buy a home with as little as a 5% down. Learn more about the 5% deposit plan from your local Mortgage Choice broker to see if you satisfy all the requirements right now.
It’s also worth noting that paying for a property entails more than just the down payment. Extra costs may develop during the purchasing process, and property buyers must account for them in their budget. You may incur pest and building control, legal fees, and other expenses.
Moreover, if you plan to buy land to construct your first home, you may be qualified to use the First Home Owner Grant and even receive government privileges on your stamp duty.
Disadvantages To Know
A house and land combination can be a wonderful alternative when purchasing a home. However, there are several disadvantages to be aware of, including the following:
1. Hidden costs
Checking at display homes can be a lot of fun, but remember that these are just showroom pieces with added extras like landscaping and decks. Know where your money is placed by asking for a full breakdown of the inclusion of the offered price.
2. Potential for blowouts
House and land combinations might allow you to customize the look of your property. It is an opportunity to tailor the structure to your lifestyle, but even minor changes to the ‘standard’ design will raise the price. Make sure your budget can accommodate any additional expenses.
3. Lot sizes can be small
New construction lot sizes have shrunk over time, averaging less than 395 square meters in Sydney, Melbourne, and Perth. It helps keep house and land packages low, but it also means that you should consider how you should build your new home to maximize your land area — and your privacy.
4. Costs of transportation
In most cases, house and land bundles are only accessible in the suburbs. If you work in the city center, this can imply a long commute on weekdays.
Transport expenditures account for 13.8 percent of Australian family income. If your new neighborhood has limited public transportation alternatives, the cost of getting to and from work can soon pile up.
Conclusion
Speaking with a mortgage broker earlier is necessary if a house and land package sounds appealing to you. At Mortgage Choice, we can explain your borrowing power — which gives you the starting point you need to know how much you can afford to spend on your new home.
Choosing a house and land package is a significant step. Call your local broker today to know more about what’s involved and understand any incentives you can avail yourself.
