Building your own home is the opportunity of a lifetime to provide yourself and your family with a dream come true, so you want to make sure you’re getting the best deal out of it. Traditionally, homebuyers purchase the land and then build on that, but now there are great opportunities to purchase house and land packages.
What’s the difference? Well, there’s not much that’s incredibly different except for the fact that you’ll often find yourself saving a decent lump of cash when you opt to buy a house and land package.
What is a house and land package?
When builders and developers see an opportunity to purchase land recently put up for sale by the government, they start by creating the infrastructure, like highways and sewage systems, which are the building blocks of an estate. Then, they attract homebuyers with already built houses or plots of land that they can customise based on industry range of designs to suit the needs of those buying the house. In other words, you have just one contract to worry about rather than a mountain of other paperwork. So if you purchase a house and land package, you’re initially just paying for the land and the construction comes after. It sounds good, and has the potential to not only be cheaper, but also make you more money in the long run.
You only pay one stamp duty
Normally, you’d pay a stamp duty on the land and another on the house. However, with house and land packages, you only pay stamp duty on the land as the house has not been built yet, which could save you up to $10,000. In addition, a package means that you pay fees to just one place, rather than paying a holding fee, initial deposit, and another 10% and more to the landowner and deposits for the builder, etc.
Tax refunds on depreciation
The best part about house and land packages is that you can claim a non-cash deduction for the depreciation of the house. While the house is under construction, the value of it depreciates which will add substantially to your bottom line come tax season. At the same time, your land will only appreciate in value as time goes on, upping the resale value significantly.
Less maintenance and repair
As you are working with a building company that is taking care of the construction for you, it is part of their job to build your home with the latest and more energy efficient appliances. This will save you in the long run, and it will also cut the need to spend money on maintenance and repairs. This is especially true when the builder offers a great warranty on the house and everything in it.
Many estates that sell house and land packages are not close to any social or public infrastructure, so you may find that it’s simply not worth it to live so far from lifestyle necessities, like work, friends, family, entertainment and retail.
In addition, you may find yourself purchasing a package for just a few years to build up some equity and then sell and move closer to the city.
If you have any further questions about house and land packages, don’t hesitate to contact one of our honest and friendly sales representatives at Rawdon Hill in Melbourne.