House and land packages in NSW: contracts, stamp duty and the grant

One contract or two

Some packages are sold under one contract for a finished house. Others use a contract for the land and a separate contract with a builder.

Which one you sign changes your stamp duty, your risk, and what you can do if the build goes wrong. We check both contracts together.

How stamp duty applies

Revenue NSW's ruling on house and land packages sets out the test.

1. If the seller must deliver a completed house, under one contract or two contracts that depend on each other, duty can be charged on the land and the house.
2. If title to the land passes to you before building starts, and the seller is not responsible for delivering the house, duty is generally charged on the land only.

This can make a large difference. We confirm the position before you sign.

Home building insurance

For residential building work over $20,000, the builder must have home building compensation insurance, and give you the certificate before taking any deposit.

It covers you if the builder dies, becomes insolvent, disappears, or has their licence suspended for failing to comply with a tribunal or court money order. It also covers non-completion. Cover is up to $340,000, for 6 years for major defects and 2 years for other defects.

The building contract

1. A written contract is required for work over $5,000. Over $20,000, it must be a large job contract.
2. Contracts over $20,000 must include a cooling-off period of 5 clear business days after you receive a copy.
3. The deposit cannot be more than 10%.
4. The contract must include a progress payment schedule. Payments should match the work actually done.

The $10,000 grant for land and a build

A first home buyer may receive the First Home Owner Grant where the land and the building together are valued up to $750,000.

The grant can be paid through your lender at the first progress payment, and must be claimed within 12 months of completion.

Read the First Home Owner Grant in NSW.

Is a house and land package worth it?

It can suit buyers who want a new home and can access the grant and stamp duty relief.

The risks are delay, building cost increases, and defects. The contracts decide who carries those risks. Read them before you sign, not after.

How much money do I need for a house and land package?

You need the deposit on the land contract, usually on exchange, and the deposit on the building contract, up to 10%.

Then stamp duty if it applies, the government registration fees, the legal costs, and the progress payments as the build goes. Your lender sets how much you must contribute yourself.

Where buyers get caught

Common questions