House & Land Packages: What First Home Buyers Miss

Why House and Land Packages Unlock More Government Support

A house and land package is treated as a new home, which means you're eligible for the full $30,000 Queensland first home owner grant and stamp duty concessions that don't apply to established properties. You'll also access the First Home Guarantee with just a 5% deposit and no Lenders Mortgage Insurance.

Consider a buyer who's been saving for two years and has $35,000 set aside. If they buy an established home, they'll receive stamp duty relief but no cash grant. If they choose a house and land package valued under $750,000, they receive the $30,000 Queensland grant, reducing the amount they need to borrow. That lower loan amount means smaller repayments and less interest over the life of the loan.

The distinction matters because lenders assess your borrowing capacity based on the loan amount you need after your deposit and any grants. A $30,000 reduction in the loan size can be the difference between approval and rejection, especially if your income sits close to the serviceability threshold.

Structuring Your Deposit Around Two Separate Contracts

When you buy a house and land package, you're signing two contracts: one for the land and one for the construction. The deposit for the land is typically paid upfront, while the house construction is funded progressively as the build reaches certain stages.

Lenders will usually require a 5% or 10% deposit on the total combined value of the land and construction contract. If you're using the First Home Guarantee, that 5% can be genuine savings, a gift from a family member, or funds released from the First Home Super Saver Scheme. The Queensland grant is paid once construction is complete and you've settled on the home, so it won't form part of your initial deposit.

In a scenario where the land costs $200,000 and the construction contract is $400,000, you'd need a minimum deposit of $30,000 under the 5% scheme. The land purchase settles first, and your lender releases funds for that. Construction then begins, with the lender releasing progress payments to the builder at stages like slab down, frame up, lock-up, and practical completion. You don't make full loan repayments during construction, just interest on the amount drawn down at each stage.

This structure gives you time to manage your cash flow, but it also means you need to budget for interest-only payments during the build, which typically takes six to twelve months depending on the builder and council approvals.

How Brisbane's Growth Corridors Affect Package Pricing

Brisbane's northern suburbs like Caboolture, Burpengary, and Narangba, along with southern areas including Logan, Yarrabilba, and Park Ridge, have seen strong demand for house and land packages due to affordability and proximity to new infrastructure. These areas often sit within the price caps for both the Queensland grant and stamp duty concessions, making them particularly attractive to first home buyers.

Packages in these suburbs typically range between $550,000 and $700,000 depending on land size and inclusions. The closer you are to major roads, train lines, or new shopping centres, the higher the land component. Buyers looking at estates near the Moreton Bay Rail Link or the Logan Motorway upgrade will pay a premium for accessibility, but those locations also tend to hold value more consistently as the area matures.

Land closer to the urban fringe, such as Ripley or Flagstone, may offer larger blocks at a lower entry price, but it's worth considering how long it will take for schools, medical centres, and retail to establish. Lenders will also assess the location when determining loan terms, and some may apply postcode-based lending policies that affect how much they're willing to lend or whether they'll accept the property as security at all.

What Pre-Approval Looks Like for a Package Purchase

Getting pre-approval before you sign a contract gives you certainty about what you can afford and how much a lender will provide. For a house and land package, pre-approval is particularly important because you're committing to two contracts at once, and the builder's timeline won't wait for finance delays.

Pre-approval for a package works the same way as any other home loan application, but lenders will want to see both the land contract and the building contract before they issue formal approval. They'll also check that the builder is registered, insured, and that the construction contract is fixed-price. Variable-price contracts or builders without adequate insurance can trigger a decline or require additional conditions.

You'll need to provide proof of income, savings history, identification, and details of any existing debts or commitments. If you're using a gifted deposit, the lender will ask for a statutory declaration from the person providing the gift, confirming it's not a loan. If you're drawing down from your super under the First Home Super Saver Scheme, you'll need to arrange that withdrawal through the ATO before settlement on the land.

Pre-approval is typically valid for three to six months, which is usually enough time to find a suitable package, sign contracts, and settle on the land. Once the land settles, the lender will release construction funds according to the building schedule.

Fixed or Variable Rates During Construction

During the construction phase, most lenders will place you on a variable rate for the portion of the loan that's been drawn down. You'll make interest-only payments on that amount until the house reaches practical completion and you move into full principal and interest repayments.

Once construction finishes and you settle on the completed home, you can choose between a fixed rate, a variable rate, or a split. A fixed rate locks in your repayment amount for a set period, usually between one and five years, which can help with budgeting if you're concerned about rate rises. A variable rate offers more flexibility, often with features like an offset account or redraw facility that let you reduce the interest you pay by parking extra funds against the loan.

Many first home buyers in our experience choose a split, fixing part of the loan for certainty and leaving the rest variable for flexibility. That approach lets you make extra repayments on the variable portion while still having a portion of your loan protected from rate increases.

Stacking the Queensland Grant with Federal Schemes

The $30,000 Queensland first home owner grant applies to new homes valued under $750,000, and it's paid after construction is complete and you've moved in. You can use this grant to reduce your loan balance, cover some of the upfront costs you've paid during construction, or hold it as a buffer for furniture and other expenses.

This grant works alongside the First Home Guarantee, which removes the need for Lenders Mortgage Insurance when you borrow with a 5% deposit. Normally, a deposit below 20% would trigger LMI, which can cost thousands depending on your loan size. The Guarantee scheme covers that risk for the lender, so you avoid that upfront cost entirely.

If you've been contributing to super with the intention of using the First Home Super Saver Scheme, you can withdraw up to $50,000 in eligible contributions and claim that as part of your deposit. That amount is taxed on the way out, but at a concessional rate, so it's still more tax-effective than saving in a standard bank account. Between the grant, the Guarantee, and the super withdrawal, you're looking at a significant reduction in the cash you need to find yourself.

When the Build Timeline Affects Your Loan

Construction timelines vary depending on the builder, the complexity of the design, weather, and how quickly council approvals come through. A standard home on a flat block in an established estate might take six months from slab to handover. A sloping block with retaining walls and custom inclusions could stretch beyond twelve months.

Your lender will extend the interest-only period to match the expected build time, but if the build runs over, you'll need to contact them to extend that arrangement. Most lenders are flexible with genuine delays, but it's worth staying in touch with both your builder and your broker to avoid any surprises.

Longer build times mean more interest-only payments, which can add up. If your loan is $600,000 and you're paying interest only during a nine-month build, you're not reducing the principal during that time, so your loan balance stays the same. Once construction finishes and you switch to principal and interest repayments, your monthly payment will increase, sometimes significantly. Budgeting for that transition is important, especially if you're moving from renting to ownership and managing a higher monthly commitment.

What Happens If You Need to Pull Out of a Contract

Once you've signed a land contract and paid your deposit, you're legally committed unless the contract includes a finance clause or cooling-off period. Most contracts in Queensland include a five-business-day cooling-off period, during which you can withdraw and receive most of your deposit back minus a penalty, usually 0.25% of the purchase price.

If you've already settled on the land and the construction contract is underway, pulling out becomes more complicated. The builder may be entitled to retain your deposit and claim damages for work already completed or materials ordered. That's why getting your finance sorted and your borrowing capacity confirmed before you sign anything is critical.

If your circumstances change during construction, such as job loss, relationship breakdown, or unexpected expenses, speak to your broker as soon as possible. Some lenders will allow you to pause repayments or adjust your loan structure, but the earlier you raise it, the more options you'll have.

Finding a Lender That Suits Your Situation

Not all lenders offer the same terms for house and land packages, and some won't lend in certain postcodes or with certain builders. Some lenders will accept a 5% deposit under the First Home Guarantee without any additional conditions, while others may require a larger deposit or proof of additional savings depending on your income or employment type.

If you're self-employed, casually employed, or working in a role with variable income like commissions or overtime, some lenders will assess your income more conservatively. Others specialise in lending to those income types and will take a more flexible approach. If you're planning to use a gifted deposit, some lenders accept that without question, while others will require you to have saved a portion yourself, typically at least 5% in genuine savings.

Working with a broker gives you access to multiple lenders and lets you compare not just interest rates but also loan features, approval criteria, and how each lender handles construction lending. A lower rate isn't helpful if the lender declines your application or imposes conditions that don't suit your situation.

If you're weighing up whether a house and land package fits your budget and goals, or you're ready to move forward and want your finance sorted before you start looking at estates, call one of our team or book an appointment at a time that works for you.

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