Existing Clients
1300 720 110
New Enquiries
1800 100 747

Home Information and Tips Guide to buying land and building

Aug 26, 2021 | Home Loan Information & Tips

There are plenty of upsides to buying land and then building. At the same time, it’s really important to know all the steps involved so you can make the best decisions along the way. This guide covers the facts you need to know, including the different ways you can purchase land and then build, and how financing differs from a standard home loan.

1. What are the advantages of buying land and building?
2. How do I choose the right block of land?
3. Do I have to pay stamp duty?
4. Am I eligible for the First Home Owner Grant (FHOG)?
5. Which land and construction lender should I talk to?

1. What are the advantages of buying land and building?

What are the advantages of buying land and building?

Done right, with expert loan advice, buying land and building can have huge benefits. For a start, you get to live in a home that’s purpose built to your needs, in an area you love. You also get to enjoy the lovely, brand newness of your home without ‘wear and tear’ from previous dwellers.

Buying land and building also brings financial advantages:

  1. When you choose the right area and land, the value of your home is more likely to grow substantially over time
  2. You may be eligible for more government grants than when you buy an existing home
  3. The amounts you borrow are initially less because they are staged by completion. The most common stages of completion are land purchase, pad (floor), roof, lockup and final completion. At each stage you draw down the amount needed from your loan, rather than one big amount when you buy an existing home.

When it comes to buying land and building your home, knowledge is power!

Arm yourself with the facts and do your homework to find out which approach suits you best. That way you’ll avoid surprises and unnecessary stress along the way.

Remember, you can always email or speak to one of our highly knowledgeable and approachable Loans Consultants for quick answers and more specific advice on buying land and building – call now on 1800 100 747.

2. How do I choose the right block of land?

Check the area has what you need.

Living in area you love is one of the huge benefits of buying land and then building. At first glance, you may be attracted to proximity to the beach or a beautiful view. Consider the following to ensure you make the best purchase decision:

Services – what services will you need now and in the future? Check if the area has adequate child care, schools, medical services, shopping and public transport. If you’re buying in a brand new area, find out when these essential services will become available? Access are there roads going in and out?

Zoning – what type of constructions are allowed in the area? Is it a general residential zone, or will there be higher density or large lot residential constructions down the track? It’s important to check zoning because the general personality of the area may change significantly in the future. It’s also important to be clear on the zoning restrictions if you’re looking to increase the value of your assets by sub-dividing or building a granny flat. Could your current view be built out by high rise buildings?

Understand the lay of the land

Apart from the size of the block, it’s important to consider the terrain of the block:

  • Tree removal can be very costly. Maybe restrictions on how many and which trees you can remove
  • Slope – building can be more complex and expensive on a sloping block. Levelling out a block (if it’s even possible) excavation can add a lot to your construction costs.
  • Rocks – what’s the land made up of? Lots of rock in the ground may add to your costs, requires more excavation.
  • Forces of nature – is the area in a high fire zone? Is it prone to flooding? Important to know this because it may create challenges for getting home insurance down the track.

3. Do I have to pay stamp duty?

If you buy land, then build a home later:

  • Stamp duty is payable on the land’s purchase price. In this scenario, your builder starts construction when settlement has taken place and the land is in your name.
  • Try to arrange for settlement to happen at the same time as building plans are approved by council. This will help minimize your borrowing costs.

If you don’t want to make any repayments until your new home is built, you can ask for a price ‘on completion’. In this scenario, the builder purchases the land and borrows money to cover building costs. The builder recoups costs once your loan comes into effect.

You pay stamp duty on the full purchase price of your land and house, as well as the following costs:

  • stamp duty and solicitor’s fees on the land purchased
  • builder’s loan costs (fees, interest)
  • construction costs

4. Am I eligible for the First Home Owner Grant?

Typically, most state governments tend to subsidise those buyers buying a new home over an established one. In NSW the $7,000 First Home Owner Grant was discontinued in 2012, and there is now a $10,000 First Home Owner Grant for new homes available.

If you’re not a first time buyer, you can still get a $5,000 grant for new homes – which means even if, for example, you’re after self-employed home loans for your second property, you can still benefit.

Similarly, in Queensland, the $15,000 Great Start Grant helps those buying or building a brand-new home, while the Australian Capital Territory only targets new or renovated properties with its $12,500 grant.

For more information about First Home Owners Grant and the New Homes Grant in NSW, visit osr.nsw.gov.au.

 5. Which land and construction lender should I talk to?

Remember that banks and mortgage brokers are not your only option for home loans. Why not talk to a mortgage manager, who will:

  • Take time to understand your individual needs
  • Provide expert advice on buying land and building
  • Tailor a loan specifically for your situation
  • Support you throughout the life of your loan.

We’re mortgage managers with a long history of supporting land and construction borrowers just like you. Call Mortgageport now on 1800 100 747 for expert advice and great rates.


While big companies have large marketing budgets to access top talents and high-quality technology that delivers results, small and medium-sized businesses consistently lag behind

has succeeded to gather A+ players, that have worked with top brands and agencies around the world

They offer their services to SMBs, for affordable prices, thanks to the technology and exclusive community Mayple provides them

Don’t just take our word for it
Frances, Barton, ACT
“Dear Col, Well the house has exchanged!! I would like to thank you for all your dedication and persistence in order for this to happen. I know you said that you were only doing your job but your efforts were above and beyond the normal call of duty. Thank you”
Kim & Paul, Dee Why, NSW
“Mortgageport was originally recommended to us by our financial adviser. We are very busy people and don’t have the time to dedicate to finding the best home loan for our needs. We were glad that Mortgageport stepped in to help us. We found that they were pleasant and thorough and really knew what they were doing, this gave us a lot of confidence. We would recommend them to anyone looking for a home loan.”
Jessica, Seven Hills, NSW
“Thank you for the excellent service your company provided us with our recent refinancing of our loan. The speed you executed all correspondence with us, either with fax, phone or post was outstanding. It was so good to just sit back and feel everything just fall into place. All your staff were courteous, friendly and understanding of our needs. In particular Gloria who looked after us from start to end. Please thank all your staff involved with our financial needs.”
Marisa, Isaacs, ACT
“We are a boutique accounting practice in Canberra with a focus on property investors. Our clients are delighted with the incredible research and effort that Mortgageport make, the feedback is always so positive. Of course with this type of feedback, without reservation, we recommend Mortgageport to anyone that needs a loan. I personally always use Mortgageport for my own personal financing needs; they are knowledgeable and always have my best interests at heart. Every team member at Mortgageport goes the extra mile, I am not just a number but a client that is well looked after and my concerns always matter.”
Susie, Sydney, NSW
“Dear Glen, I would just like to express how impressed I have been with Beth, she has been a great support and her assistance has been invaluable, I could not have done without her advice; being rather a novice at all this it has been so good to have her advice and backup which she does in both a professional and empathetic manner.“
Linda, Chatswood, NSW
“Mortgageport did a brilliant job! I never ceased to be amazed at your patience and perseverance, not to mention efficiency, while organising the refinancing of our existing loans and financing the new property at Wobby Beach. We are very pleased with the way you set up the loans with St George and have found them extremely efficient and helpful.”
Fay, Boonah, QLD
“We were initially referred to Michael McKelvie at Mortgageport in early 2005 when we wanted to begin to put together a portfolio in Queensland. Our dealings with Michael went so smoothly, that we have continued to deal with him through multiple transactions to the present day. In our experience Mortgageport has a great team, they are professional and timely and have been able to provide exactly the right product for our needs. We have even utilised Mortgageport for personal real estate purchases as well. We continue to use Michael McKelvie and Mortgageport and will continue to do so, and have recommended Mortgageport to others and have absolutely no hesitation in doing so.”
Michael, Sydney, NSW
“I had an investment loan with a major lender for a holiday rental property in Culburra Beach. Unfortunately, I was not given a very good deal and I was also disappointed with the level of customer service. After investigating my refinancing options, I found that Mortgageport offered the tailored approach I was after. I wanted the process to be simple, streamlined and above all personalised. Glen Spratt, Mortgageport Managing Director, took the hassle out of the process by dealing directly with my accountant and the bank, briefing me when necessary. Glen secured a competitive rate and managed my expectations about dealing with the Bank of South Australia, a lender I hadn’t dealt with previously. I have been extremely satisfied with the outcome and have already recommended Mortgageport to five other colleagues.”
Loli, West Hoxton, NSW
“I am overwhelmed with how efficient you and your office are. I was advised by a friend that these things take weeks to put together. Well wait till I tell her it only took 24 hours. Once again, thank you for all your help.”
Jane, Rosebery, NSW
“Dear Michael, We remember you well from a few years back. We know we are in capable hands and all our contacts with Mortgageport consultants have been highly professional and positive.”
Chris, Canberra, ACT
“I have dealt with Mortgageport on two occasions now (specifically with Michael McKelvie) and have found not only their service to be of the highest professional standard, but they are also such a lovely friendly team to deal with. In a country where I feel the service industry has to a large degree fallen apart, the team at Mortgageport have always gone above and beyond the call of duty to address and guide me and my young family with time, patience and a really easy-going approach with all our mortgage related endeavors. I am not an investment banker or necessarily fabulous with facts and figures but still believe in equity and sustainable growth. I look forward to working with Mortgageport to develop a property portfolio now and well into the future.”
Tim, Maroubra, NSW
“I was introduced to Mortgageport by my father (one of Mortgageport’s first customers), back in late 2002 when I bought my first home. Since then, I have transacted four additional mortgages using their services. Each time I have found the advice to be professional, accurate and insightful as the staff draw from their considerable experience base. I am repeatedly delighted by their friendly personable approach, and the efficiency and speed of the way they do business.”
Kim & Paul, Dee Why, NSW
“Mortgageport was originally recommended to us by our financial adviser. We are very busy people and don’t have the time to dedicate to finding the best home loan for our needs. We were glad that Mortgageport stepped in to help us. We found that they were pleasant and thorough and really knew what they were doing, this gave us a lot of confidence. We would recommend them to anyone looking for a home loan.”
Liz, Pyrmont, NSW
Recently I had my loan re-financed through your organisation. I had the pleasure of being looked after by Chris Auton. Chris was absolutely fantastic in the way he explained everything in easy to understand terms, kept me up to date with regular progress reports and gave clear advice on exactly what was needed. Chris’ professionalism and attention to detail were outstanding. It is not often you get such great customer service, hence why I decided to give this feedback.
Robbie and Sallie Newson, Southport Qld
Michelle is the ultimate professional! From the first phone call right through to well past the actual settlement of the property we could not be more impressed with Michelle. We found Michelle to be friendly, extremely approachable and most of all professional. Michelle was more than happy to answer any question we had and her willingness to fit in with our busy work/life schedules was amazing and very much appreciated. The ease at which Michelle obtained approval for our loan and the way in which she conveyed information either in person, by phone, email or text was exceptional. Michelle definitely takes pride in her work and that is 100% evident in the way she conducts herself and business matters she completes. Michelle is a huge asset to Morgageport but most of all she is a true godsend for her clients. We are thrilled to recommend Michelle to the highest degree.
Contact us for help with your finances