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Are House and Land Packages A Good First Investment?

Industry News 14 Dec 2018
House and Land packages, front facade

So you’re in the market for your first investment property. The big debate then, is whether to buy an existing house or to purchase brand new – so new in fact, it is yet to be built. This latter option refers to a house and land package, wherein a developer builds infrastructure on empty land, then allows the buyer to choose a plot of land and specify the type of house they want. Houses are often customisable, allowing buyers to opt for the features they value most. A house and land package can be a great investment, and the benefits to this option are fairly extensive.


Stamp duty concessions are available

[There have been updates to the way these concessions work, and much of the information online is now out of date.]

One of the biggest draw cards for buying a house and land package is the potential for reduced stamp duty. There’s a lot of information out there about this, but it’s absolutely important to understand that there have been updates to the way these concessions work, and much of the information online is now out-of-date.

The way it used to work is as follows: The land and the construction are considered separate contracts. The land component would be transferred to the investor, while the build contract was secondary. In this scenario, the stamp duty you would pay would be on the value of the land alone, not the improved capital value (the combined value of both the land and the house). This is no longer correct, so ignore this information if you come across it online.

  • Stamp duty concessions in WA

For investors buying in Western Australia, you’ll be eligible for stamp duty concessions if this is the first property you’ve purchased and if the land is worth less than $300,000. If the land component of the package is worth more than that, the rate of duty is $13.01 for every additional $100 over the $300,000 threshold. This could save you up to $8,000. Find out more about stamp duty in WA here.

  • Stamp duty concessions in VIC

Investors in Victoria, the old rules still apply, so long as this is your first property purchase, the house and land package is worth less than $550,000, and you use the property as your primary place of residence for a period of 12 months that begins within 12 months of the completed build. Note that you can not use the First Home Owners Grant in conjunction with the stamp duty concession – it has to be one or the other. Potential savings here are a considerable $28,000. Find out more about stamp duty in VIC here.

  • Stamp duty concessions in QLD

For those looking to buy in Queensland, the First Home Vacant Land concession is available. In order to qualify, you must be purchasing your first property and intend to use the house as your primary place of residence within two years of the date of transfer. If the land is valued at less than $250,000, there is no stamp duty required, and with more expensive land comes progressively smaller concessions. An example here is that land worth $250-260,000 will save $7,175 while land worth $390-399,999 will save only $525. Above $400,000 there is no concession. Find out more about stamp duty in QLD here.

  • What does this mean for new investors?

It’s true that stamp duty concessions aren’t quite as kind to new investors as they once were, but it doesn’t mean investment in a house and land package is off the table all together. The biggest drawback is that you’re required to use the property as your primary place of residence. If it’s possible, you could take advantage of the concessions by living in a share-house. In this sense, you could charge housemates enough rent to cover mortgage payments, and you would only be required to live in this setup for a year. If you live outside the states we’ve talked about, you can find more information here.

Stamp duty concessions are available for first time investors if you’re willing to be flexible.

Reduce your tax bill by claiming on depreciation

Having a brand new home means you can claim on depreciation more so than you would be able to in an established home. A plant and equipment allowance covers fixtures and fittings, appliances, carpets and blinds. The idea here is that as your house ages, the equipment inside will lose value as the condition gradually worsens. If you receive rental income from your property, then you can claim the depreciation as a tax deduction. In order to meet the requirements of the Australian Tax Office, you’ll need a depreciation report from a quantity surveyor.

Save on maintenance

Buying a house and land package also presents a much easier process of preparing the house for rent. As it’s brand new, you’ll be able to skip a lot of the costly and time consuming processes required with an older, existing home. For example, the house is unlikely to need any renovation or maintenance work, and there’s no need to carefully document the condition of the house prior to the beginning of a tenancy.

Tenants are generally willing to pay premium rent on a brand new house.


A house and land package isn’t just a more affordable investment for first time buyers or builders, it’s also a great way to ensure strong rental yields and there are two key reasons your brand new house will be appealing to renters. The first is that the house will be a brand new home, and new homes tend to attract a better quality of tenant who will expect to pay a little more for a premium property. Ultimately this means you’ll have a greater number of tenants to choose from, and charging premium rent will lead to better returns on your investment.

The second reason is that land for house and land packages is typically developed in carefully chosen locations. Your property will be part of a new community that has its own amenities, infrastructure, and will be ideally situated in an area that’s not just growing, but also connected to centralised employment hubs. In this sense your tenants won’t just be renting a house, they’ll be buying into a lifestyle, which is a far more attractive option than many pre-existing rentals offer.

Buying a house and land package gives you the option to build the house you want.


A house and land package also gives you a degree of flexibility without over complicating matters. In most cases, you’ll have your choice from a selection of lots available in a new development. This allows you to select one that most closely represents what you are looking for in land, and the fact that you have options is much more appealing than settling for whatever standalone lot that might be available while you’re browsing.

The same goes for your house. You’ll be able to select a design from a range of options, and better still, you can customise it to suit you. Whether you’re investing to turn the house for a profit later, or to occupy it yourself one day, you have the ability to optimise it for a certain lifestyle. This is also far simpler and more affordable than hiring an architect to design a house for you. The hard work is done, but you still have options for personalisation.


Before you commit to anything, you should do your due diligence and make sure you understand all the angles. You’ll want to ensure that you fully understand all the additional costs involved (such as stamp duty) and seek the peace of mind that only comes from working with a trustworthy, reputable and experienced property developer.

Satterley has over 37 years’ experience in developing award winning communities and delivering outstanding service to customers. For more information about house and land packages, or to get started with your investment, contact the team today.