stevelaird

Hi All

This might sound a bit like a daft question but can you get a mortgage for a house and land package even if the building has not even started yet.
I also read some where that you dont have to pay stamp duty on these type of houses is this true and has any one done it on a mortgage will prob be around the 80% mark.

cheers all steve

Mairead

Cant help with the mortgage question but heres what I found on the stamp duty. This is more than likely the option we will go down also.

Developers usually offer two different packages. The first involves you purchasing the land from the developer before they build the house. The second option sees the developers build the house on their own land, which you purchase once construction is completed.

Buying the land from the developer prior to construction will mean that you pay a deposit on the land (usually 10% of the purchase price). The balance of the land's value is to be paid upon settlement, after which the builder will commence construction.

Under this type of package you will need two different loans - a land loan and a building loan. The advantage to this arrangement is that stamp duty is not payable on the cost of building the house (only on the value of the undeveloped land).

During the course of constructing your home you will be required to make progress payments. These payments will be made at various stages of the construction, e.g. when the framework is erected, after brickwork and tiling is completed and at lock-up stage.

If, however, you choose to have the developer build on their own land, you will usually be required to pay a deposit of 5% before building begins. There are no progress payments; with the balance being due once construction is complete.

This approach allows you to defer payments until the house has been built, an especially attractive option if you need to continue paying rent until this time.

However, this package will be more expensive overall, as you must pay stamp duty on both the house and the land. Also, the developer is likely to increase the total purchase price to compensate for the interest costs incurred by purchasing the land and building materials.

Taken from:

http://www.wizard.com.au/homeloans/task.aspx?id=3

mand8002

We purchased a house and land package. It is cheaper to buy the land and then have the house built rather than buy the house ready built, and you only pay stamp duty on the land value. We applied for a mortgage for the full amount we needed and the bank released it in stages when payments were due. During this time you pay interest only on the amount of the loan drawn down.

Geelong Gent

Agree with above and only adding:

If you buy your own land - do go to the council and put up with the hassle of arranging planning permits. Although not going through with a standard builder myself, when i researched them they were really taking the piss in terms of making the planning arrangements with the council.

Although they can be pains in the neck they provide a lot of information and happy to guide you through the process.

Another cost i found cheaper to do myself was a soil test (and stand your ground even when they say its all included) in my experience they came around and were willing to take the results from my test (the ironic thing... the soil tester i used was the same one they subcontract too).

Timber Floor Au

Disagree totally.

I am racking my brain trying to think of an instance where this would occur and it would be cheaper and I really cannot.

Unless I have misinterpreted a slightly ambiguous statement.

1. buy land and then get house built

versus

2. buy a house already constructed, 2nd hand

versus

3. get a land and build package off the shelf

In either solution, the most expensive way to go, is Buy the land, and then instruct a builder to build on that land for you ( one off )

I really cannot think of any exceptions to the rule, albeit im sure there are.

Geelong Gent

Steve are you considering the "price paid" or the value overall?

Would your thoughts be waived given the same house but different location? The value of location moves dramatically different to the steady increase soley attributed by the value of the building itself.

Excuse me if these factors are not relevant to Qld but house and land package in Melbourne could be $276K for house on a $300K plot by builder $576K. Say you pay a premium for same house but putting it on your own plot $306K and plot $600K - $976K V $576K
On price going with the builder would be far cheaper some $400K but:

The better plot (can't see where anyone would do this for a worse plot) should increase in value greater than that of the cheaper.

$600K @ 5%
$300K @ 2.5% (also consideration that builders often make a lot of money out of the plot sales - I know for a fact they do down here as margin on build cost just would not be viable for long term investors)

Shane

Timber Floor Au

Perhaps as i suggested, the previous posters post was slightly ambiguous.

Buying Land and Build as a package, is deffo cheaper, than buying land and then sourcing a builder.

Ste

donna

Weve done both,house and land package from builder and purchased own land and had builder do a one off(own design).Value for money we definitely got a better deal doing our own build.
good luck in whatever you decide and i do think its very dependant on the builder you choose.
donna

paulhill

We have purchased land then found a build (smallish builder), this worked out a LOT cheaper for us.

mand8002

I was comparing prices for new builds..........not an older house and did not mention a 'one off' build.

Purchasing land and then having the house built by Ausbuild worked out $25 000 cheaper than buying the same block with the same house design as a house and land package. It amounted to a package as we paid one builder for everything, but obviously if they build it first then sell it it is going to be more expensive as they have financed the build. Our neighbours paid more than us for their house and land package for a block 2/3 the size and a much smaller house, built by the same builder as us!!

Timber Floor Au

Im in awe.

Cos most house+land packages service a discount due to their very nature.

Example a developer buying 10 acres, subdividing into 1/4 acre lots and then building on each of those lots and selling them off individually is usually a damn site cheaper than ... sourcing a 1/4 acre lot and then sourcing a builder after you have purchased the land.

Timber Floor Au

I find that incredible, obviously ppl will share their experiences.

a house+land package would normally include all landscaping ( some turf ) , alfresco concrete, sometimes a cpl of a/c's thrown in, tiling etc.

When you normally buy a block or lot, and engage a house builder , his sole purpose is to erect the house, to min standards.

If said same house builder is offering a cheaper alternative on one off builds, that makes a mockery of the current qld construction regime of production line construction.

Are we infact comparing apples with apples?

asprilla

Completely agree with the above...paying a fair whack more to ensure that the same house is built on a higher quality piece of land, will see you far better off in the long term (in my opinion).

Timber Floor Au

Generally in Qld. I would imagine anywhere, bulk buying becomes cheaper.

Example:

you see a lovely lot being sold privately, un serviced. $200k

alternative: same lot size avail via a multi purchase developer, for say $160k serviced.

They do in fact pass the savings on, via land banking. Some obviously dont lol.

Builder doing 10 houses ina tin pot street, spend approx $140k per house , resale say $299k + land $450k inc landscaping, concrete driveway, alfresco tiling painting even some carpets are thrown in, irrigation, shrubs and a post box ! lol

Do the same yourself, for a apples for apples block, and generally works out much more expensive.

Ste

CazYaz

Would there not be a benifit from building yourself?

The 2nd hand house you buy is already at market value.
The land package is at market value - as the builder already knows the market value, but with your own land with a 1-off house build would surely be worth more when completed than the others for the same sort of money outlaid?

Think?