Simple hacks to buy a house and land package

Why house and land packages appeal to PAYG first home buyers

House and land packages let you purchase a new home without competing against investors in bidding wars or worrying about renovation costs. You buy the land and the builder constructs your home under a fixed-price contract, which means you know exactly what you're paying upfront.

For PAYG professionals, this structure works well with lender serviceability checks because your income is predictable and your employment is usually ongoing. The real advantage is that you can often access government grants and stamp duty concessions that don't apply to established homes, and you can stage your deposit to align with construction milestones rather than finding the full amount at settlement.

How the deposit structure works with two separate contracts

When you buy a house and land package, you're signing two contracts: one for the land and one for the building work. The land settles first, which means you need your deposit and any associated costs ready at that point. The construction contract is a separate agreement with progress payments that typically happen at key stages like slab pour, frame-up, lock-up, and completion.

Consider a buyer purchasing a package in a growth corridor outside Brisbane. They settled the land with a 10% deposit using the First Home Guarantee, which meant no Lenders Mortgage Insurance on that portion. The construction loan was then drawn down progressively as the build advanced, and the lender inspected at each stage before releasing funds to the builder. Because the property was new, they accessed the Queensland $30,000 grant and paid no stamp duty on the land purchase, which reduced their upfront cash requirement significantly.

You need to account for the fact that once the land settles, you'll be making loan repayments on that portion while still paying rent until the house is complete. Most lenders will allow interest-only payments during construction to keep costs manageable, but you need to budget for both your current accommodation and the new loan at the same time.

First home buyer grants that apply to house and land packages

Most state-based first home owner grants are designed specifically for new homes, which makes house and land packages one of the few ways to access the full suite of government support. In New South Wales, eligible buyers receive $10,000 for a new home or house and land package valued up to $750,000, and can claim a full stamp duty exemption on properties under $800,000.

Victoria offers $10,000 for new homes up to $750,000 and provides stamp duty relief up to the same threshold. South Australia abolished stamp duty entirely for first home buyers purchasing new homes from mid-2024 onwards, regardless of price, and offers a $15,000 grant for new homes valued up to $650,000. Western Australia recently lifted its grant cap to $800,000 and increased stamp duty concession thresholds by $100,000 in the latest budget.

The Northern Territory's HomeGrown Territory Grant is the largest in the country at $50,000 for new builds, with no price cap, running until September 2026. Queensland's $30,000 grant for new homes under $750,000 is also substantial but expires at the end of June 2026, so timing matters if you're buying in that state.

You can stack these state-based grants with the federal First Home Guarantee, which was expanded in October 2025 to remove income caps and place limits. That scheme lets you buy with a 5% deposit and avoid Lenders Mortgage Insurance, which can save tens of thousands depending on your purchase price.

Fixed or variable rates when construction takes six to twelve months

Most lenders will let you lock in a fixed rate when the land settles, but you won't start paying principal and interest until construction finishes and you move in. During the build, you're typically on interest-only payments calculated on the amount drawn down so far, which increases as each progress payment is made.

If you fix your rate at land settlement and construction takes nine months, you're protected from rate rises during that period but you're also committed if rates fall. Some buyers split their loan, fixing half and leaving half variable, which gives them access to an offset account on the variable portion while still locking in some certainty on the fixed side.

In a scenario where construction is delayed by several months due to weather or supply issues, a variable rate gives you more flexibility to make extra repayments or adjust your loan structure without break costs. A fixed rate gives you certainty on repayments, which can help with budgeting if you're managing rent and a mortgage at the same time. The choice depends on your risk tolerance and how stable your income is during the build period.

How lenders assess your borrowing capacity as a PAYG professional

Lenders calculate how much you can borrow based on your gross income, existing debts, living expenses, and the loan's interest rate. As a PAYG employee, you'll need recent payslips, tax returns, and sometimes a letter from your employer confirming ongoing employment. Lenders generally prefer to see at least six months in your current role, though some will accept three months if you're in the same industry.

Your borrowing capacity shrinks if you have existing debts like car loans, credit cards, or HECS. Even if you don't carry a balance on your credit card, lenders assess you as if you're using the full limit, so it's worth reducing or cancelling cards you don't need before applying. Buy Now Pay Later accounts are also treated as ongoing commitments, even if the balance is zero.

For house and land packages, lenders also factor in the construction timeline. If you'll be paying rent and a mortgage simultaneously for six months, they'll check that your income can service both. Some lenders are more generous with their assessment rates than others, so working with a mortgage broker can help you find a lender whose policies suit your situation.

Pre-approval before signing the land contract

You should have formal pre-approval in place before you sign the land contract, not just an online estimate or a conditional indication. Pre-approval means the lender has assessed your income, debts, and deposit, and confirmed they'll lend you a specific amount subject to property valuation and standard conditions.

Without pre-approval, you risk signing a contract and then discovering the lender won't finance the full amount or that the valuation comes in below the purchase price. Developers usually require a 10% deposit when you sign the land contract, and if you can't settle because your finance falls through, you may lose that deposit.

Pre-approval also gives you a clear timeline. Most pre-approvals are valid for three to six months, which should cover the period between signing the land contract and settling the land purchase. If construction is delayed and your pre-approval expires before the house is finished, you'll need to reapply, so keep your broker updated on any changes to your income or debts during the build.

Using the First Home Super Saver Scheme to build your deposit faster

The First Home Super Saver Scheme lets you contribute up to $15,000 per financial year into your superannuation fund, then withdraw up to $50,000 of contributions plus earnings to use as a deposit. You're taxed at 15% on contributions instead of your marginal rate, which means someone earning $80,000 a year saves around 22% in tax on every dollar contributed compared to saving outside super.

You can make voluntary concessional contributions through salary sacrifice or personal deductible contributions, and you can also make non-concessional after-tax contributions if you've already maxed out your concessional cap. When you withdraw the funds, you pay tax on the earnings portion at your marginal rate minus a 30% offset, which usually results in a small tax bill but still leaves you ahead compared to saving in a standard bank account.

If you're planning to buy in the next 12 to 24 months, the scheme is worth considering, especially if you're in a higher tax bracket. You'll need to apply to the ATO to release the funds, and the process takes a few weeks, so factor that into your settlement timeline. The scheme works particularly well for couples because each person can contribute and withdraw separately, effectively doubling the total amount you can access.

What to budget beyond the deposit and purchase price

Settlement costs on the land portion include stamp duty (unless you're exempt), legal fees, land registration, and any adjustments for rates or utilities. On the construction side, you'll pay progress payments as the build advances, and you may also need to cover items like landscaping, driveways, fencing, and floor coverings if they're not included in the builder's contract.

Lenders Mortgage Insurance is calculated on the total loan amount, including both land and construction, so even though you're drawing down progressively, the LMI is based on the final loan value. If you're using the First Home Guarantee, LMI is waived, which can save you anywhere from $10,000 to $30,000 depending on your deposit size and purchase price.

You should also set aside a buffer for cost overruns or delays. Builders usually include a provisional sum for items like site works or retaining walls, and if the actual cost exceeds that amount, you'll need to cover the difference. A contingency fund of around 5% of the construction value gives you breathing room if unexpected costs come up during the build.

When to involve a broker instead of going direct to a lender

If your situation is straightforward and you've been with the same employer for several years, have a clean credit file, and a 10% deposit saved, you might be comfortable applying directly. But house and land packages involve two contracts, staged drawdowns, and multiple settlement dates, which means there's more room for timing issues or lender-specific policy quirks to cause problems.

A broker can structure the loan so the land and construction components are both approved upfront, confirm which lenders accept your builder, and make sure your pre-approval is valid through both settlement dates. They can also identify lenders offering better interest rate discounts for new builds or those with more flexible policies around construction timelines, which can save you money and stress over the course of the build.

Brokers also have access to lenders that don't deal directly with the public, and some of those lenders have lower fees, higher borrowing limits, or more generous policies around things like genuine savings requirements or gift deposits. If you're using a family gift for part of your deposit, not all lenders accept that, so knowing which ones do before you apply saves you time and disappointment.

Call one of our team or book an appointment at a time that works for you

If you're ready to move forward with a house and land purchase, or you're still weighing up your options, get in touch with Artisan Finance. We'll walk you through deposit requirements, grant eligibility, and loan structuring so you know exactly where you stand before you sign anything. Call one of our team or book an appointment at a time that works for you.

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