Understanding the basics of house and land packages

A house and land package allows first home buyers to purchase vacant land and a new build under separate contracts, often combining federal and territory incentives that do not apply to established homes.

For buyers in Canberra and Belconnen, this structure opens access to the ACT Home Buyer Concession, which from 1 July 2026 provides full exemption from conveyance duty regardless of property value or household income. The Australian Government 5% Deposit Scheme also applies, with a property price cap of $1,000,000 across the ACT. Both can be used together.

Why house and land packages differ from established property purchases

A house and land package involves two separate contracts: one for the land and one for the building work. The land contract settles first, transferring ownership of the vacant block. Construction begins once the land is registered in your name. The building contract is typically signed with a registered builder before or shortly after land settlement.

Because the property is treated as a new home rather than an established dwelling, it qualifies for government incentives that do not extend to existing houses. The ACT Home Buyer Concession applies to both land purchases and completed new homes. Buyers must own and occupy the property as their principal place of residence continuously for at least one year commencing within 12 months of settlement.

Lenders assess house and land packages differently from turnkey properties. Pre-approval is based on the combined land price and construction cost, but funds are released in stages as the build progresses. Most lenders require the land contract and building contract to be signed within a set period, typically 12 months, to maintain loan approval.

How lenders structure finance for house and land packages

Lenders release funds in two stages. The first drawdown occurs at land settlement and covers the land purchase price plus associated costs such as conveyancing and duty. The second stage is a construction loan that disburses progressively as the builder completes defined stages, typically slab, frame, lock-up, fixing, and practical completion.

Progress payments are verified by an independent inspector engaged by the lender. Once a stage is signed off, the lender releases the corresponding portion of the loan to the builder. Most participating lenders under the 5% Deposit Scheme offer construction facilities, but not all provide the same loan features during the construction phase.

During construction, interest is calculated only on the amount drawn down to that point. Some lenders allow interest-only repayments during the build, reducing cash flow pressure before the home is habitable. Once construction is complete and the occupancy certificate is issued, the loan converts to principal and interest repayments and the full loan amount becomes active.

Deposit requirements and the 5% Deposit Scheme

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit without paying lenders mortgage insurance. The scheme applies to house and land packages where the combined value of the land and completed dwelling falls within the applicable price cap.

Applications are made through a participating lender. Not all lenders participate, and those that do may impose additional credit criteria beyond the minimum scheme requirements. A broker can confirm which lenders on the panel offer construction facilities and which loan features, such as offset accounts or rate types, are available during and after the build.

Genuine savings or a gift from a family member can make up the 5% deposit. Lenders define genuine savings as funds held in your name for at least three months. A gifted deposit is acceptable under the scheme, but the lender will require a signed statutory declaration from the donor confirming the funds are a gift and not a loan.

ACT duty concessions and occupancy requirements

The ACT Home Buyer Concession removes conveyance duty entirely for eligible first home buyers from 1 July 2026. No property value cap applies. Buyers must be individuals aged 18 or over with no relevant prior property interest, and must occupy the home as their principal place of residence for at least one year starting within 12 months of settlement.

For a house and land package, settlement refers to the date the land title is transferred. The occupancy requirement does not begin until the house is built and you take possession, but the 12-month window to move in starts from land settlement. If construction takes longer than 12 months, you must move in as soon as practical completion occurs and occupy the property for the full continuous 12 months from that point.

The concession applies to the land component only. No separate grant is available in the ACT. The federal schemes remain the primary financial support mechanisms for first home buyers in the territory.

Fixed rate, variable rate and offset account options during construction

Most lenders offer variable rate loans during the construction phase. Some allow you to fix the rate once construction is complete and the loan converts to principal and interest. Fixing during construction is less common because the loan balance increases progressively and lenders prefer to lock in rates on a known final amount.

An offset account is typically not available during construction because repayments are interest-only and the loan balance is changing as each progress payment is made. Once the loan converts to principal and interest, offset accounts become available with most lenders, depending on the loan product selected.

Split loan structures, where part of the loan is fixed and part is variable, are generally set up after construction is complete. During the build, the loan operates as a single facility under the construction terms. You can request a split once the final drawdown occurs and the loan is fully funded.

Pre-approval timelines and contract conditions

Pre-approval for a house and land package should be obtained before signing either contract. Most pre-approvals are valid for three to six months, but construction timelines often extend beyond this period. Lenders require the land contract to settle and the building contract to be signed within the pre-approval validity period.

If the land is part of a new estate in Belconnen or Gungahlin, title registration can take several months. Developers often provide an estimated settlement range rather than a fixed date. A subject-to-finance clause in the land contract should allow sufficient time for formal loan approval, typically 30 to 45 days, and should specify that approval is conditional on the builder and construction contract also being acceptable to the lender.

Lenders assess the builder's credentials, insurance, and contract terms as part of the approval process. The building contract must include adequate progress payment stages, a fixed price, and appropriate statutory warranties. If the builder is not on the lender's approved panel, additional documentation or alternative lender options may be required.

Budgeting beyond the land and build price

Conveyancing, building and pest inspections, and loan application costs occur at land settlement. Even with the ACT duty concession removing transfer duty, budget for legal fees, title searches, and settlement agent charges. These typically amount to several thousand dollars.

Once construction begins, council rates, land tax, and interest repayments apply even though the property is not yet liveable. Insurance for the land and the building works in progress is required. Most builders include contract works insurance in their quote, but you remain responsible for insuring the land itself.

At practical completion, budget for connection of utilities, final inspections, occupancy certificate lodgement, and any landscaping or fencing required to meet lender valuation conditions. Lenders will not release the final progress payment until the occupancy certificate is issued and the property is valued as complete.

Which suburbs in Canberra and Belconnen offer house and land opportunities

Belconnen suburbs including Strathnairn, Macnamara, and the broader Gungahlin region have active land releases. These estates often feature titled lots ready for immediate settlement, reducing the wait time between contract and construction commencement.

Woden Valley, Molonglo Valley, and parts of Tuggeranong also offer new estates with house and land packages. Buyers should confirm whether the land is titled or part of a future stage, as untitled land requires additional waiting periods and may affect pre-approval validity.

Proximity to the Belconnen Town Centre, Westfield shopping precinct, and the University of Canberra makes the northern suburbs a consistent focus for first home buyers seeking new builds. Transport links via Gungahlin Drive and Belconnen Way provide access to central Canberra employment hubs.

Call one of our team or book an appointment at a time that works for you. We work with first home buyers across Canberra and Belconnen to structure finance for house and land packages, access the 5% Deposit Scheme, and confirm eligibility for ACT duty concessions before contracts are signed.

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