When you think about your dream house, you imagine having the choice to make it look like you envisioned. The beauty of a home and land package is it does just that. From design choices to budgeting, the appeal of a North Homes home and land package extends throughout all areas of your build journey such as choosing your colour scheme or favourite facade, to stamp duty savings and builder guarantees.
What is a home and land package?
The opportunity to choose both your block and home during the same process under two separate contracts is an appealing option for many buyers due to its efficiency and clarity. By purchasing from two different entities, you as the buyer will know exactly what the separate land and build costs will be.
These packages usually come with fixed prices and by locking in the construction cost from the start, you’ll have the peace of mind that the budget will stay on track. Alternatively, if your finances allow, you also have the flexibility to upgrade certain items at an added cost to suit your personal tastes.
What is the appeal of a home and land package over an existing home?
Having a clean slate to start from is one of the main reasons homebuyers prefer a home and land package. Being able select from a range of options to find a block, layout and design that best suits your needs is a luxury of planning and provides you with peace of mind that you know your home is perfectly suited to your needs.
The stress of having to worry about any future repairs or renovations is also reduced as our home and land packages come with a six-year builder’s warranty. Combined with the knowledge that modern building standards are incorporated in your build, you’re safe in the knowledge that the running and maintenance costs will also be minimal.
There are also benefits for landlords, as tenants almost always prefer new homes so there’s financial security in knowing there will be demand in the market for your property.
Home and land packages are popular among investors due to the depreciation and tax benefits they receive from new properties as they age. Investors can claim tax deductions for assets such as new fixtures and fittings and a depreciation schedule helps them save more than an already established home.
Will my stamp duty be affected?
The good news for buyers of home and land packages is stamp duty is only calculated on the land component – not the home as well – therefore reducing the fee compared with an existing home purchase.
For first homebuyers, they receive an added bonus as stamp duty is waived completely for eligible purchasers, until the end of 2022.
How is a home and land package different from a knock-down rebuild (KDR)?
The differences between buying a home and land package and knocking down an existing house to rebuild a new one, often referred to as a KDR, can be significant.
KDR projects can face challenges such as heritage hurdles, traffic control concerns, asbestos removal, demolition costs, block restrictions and a long wait for DA approval from council. Many people also have to factor in rental budgets for alternative accommodation for the duration of the build, which can be costly for larger families.
There are also additional hours, often unforeseen, where homeowners have to adjust budget costs and keep track of their schedule, to ensure their project stays on track through to the end. With a home and land package however, a lot of the hard work has already been done. Approvals are taken care of and work can begin in a relatively stress-free manner within a much shorter timeframe than a KDR – and at a fixed price.
The financing for a home and land package usually consists of two steps: buying the land then building the house. The loans can be arranged separately, but are usually bundled together.
First, buying the land is a standard property transaction with a regular mortgage. Secondly, you’ll need to take out a construction loan where you ‘draw down’ an agreed amount to pay for each stage as your home is built. That way you only pay interest on the portion of money you’re using at each stage, which will save you thousands in today’s interest rate climate.
What are the benefits of strong partnerships in home and land packages
At North Homes, we have carefully selected highly regarded and well-known brands to partner with, so we know we are delivering high quality homes with trusted suppliers. Featuring Caesarstone®, Dulux, Reece, Beacon Lighting and Colorbond® among our long list of premium suppliers, when you choose to build with North Homes, you really are choosing the very best products for your home.
10 reasons why a house and land package can be a good investment
1. You can benefit from significant savings and even receive government grants, incentives or concessions
2. You can claim costs on asset depreciation
3. Other tax benefits are on the table as an investor
4. They are usually located in upcoming areas with strong growth potential
5. Most have lower entry costs compared with established areas
6. Most tenants prefer new homes over existing ones
7. House and land packages can have good rental yield
8. New homes mean low maintenance living
9. There are builder warranties for peace of mind
10. They offer flexibility to help maximise your returns