How to Buy a House and Land Package as a First Home Buyer

House and land packages split your purchase into two contracts, which changes how deposits work and when settlement costs hit your account.

For paediatric nurses entering the property market, this structure creates opportunities that standard established home purchases don't offer. The deposit requirements differ between the land contract and the building contract, and the timing of each payment can be managed to suit your savings pattern. Understanding how these contracts interact with low deposit options designed for healthcare workers determines whether a package purchase works within your current financial position.

Deposit Structure for House and Land Packages

You'll pay a deposit on the land contract first, then a second deposit on the building contract after the land settles. The land deposit typically sits between 5% and 10% of the land value, while the building deposit is usually 5% of the construction cost. These don't need to come from the same source at the same time.

Consider a paediatric nurse purchasing a package where the land costs $200,000 and the building contract is $350,000. With a 10% land deposit, you'd need $20,000 for that first contract. The building deposit of $17,500 isn't required until the land settles, which might be 60 to 90 days later. This staggered approach spreads your upfront cash requirement across several months rather than demanding the full amount immediately.

Some lenders structure this differently again. They'll calculate the total package price, apply the deposit percentage to that combined figure, then allocate the deposit across both contracts according to their credit policy. The 5% Deposit Scheme for Nurses can reduce the initial cash requirement significantly when applied to the full package value, though not all lenders accept house and land packages under these schemes.

First Home Buyer Stamp Duty Concessions on Package Purchases

Stamp duty concessions apply to the land contract in most states, provided the total package value stays within the relevant threshold. The building contract isn't subject to stamp duty because it's a construction agreement, not a property transfer.

In Victoria, first home buyer stamp duty concessions apply to properties valued up to $1,000,000, with full exemption available for properties under $600,000. If your land component is $200,000, you'll pay stamp duty only on that portion. The $350,000 building contract doesn't attract stamp duty at all. This structure can reduce your total upfront costs compared to purchasing an established home at the same combined price.

You'll still need to budget for settlement costs on the land contract, which include legal fees, title searches, and adjustment costs. These typically run between $2,000 and $3,500 depending on the state and your conveyancer's fee structure.

How First Home Loan Deposit Scheme Works with Packages

The First Home Loan Deposit Scheme allows eligible buyers to purchase with a deposit as low as 5% without paying Lenders Mortgage Insurance. Not all lenders accept house and land packages under this scheme, and those that do often impose additional conditions around the builder and the construction timeline.

The scheme calculates your 5% deposit against the total package value, not just the land component. If your package totals $550,000, you'd need $27,500 as your deposit contribution. The lender then covers the gap between your 5% and the usual 20% deposit requirement without charging LMI. However, the builder must be registered, the construction contract must meet the lender's specifications, and the build must commence within a set timeframe, usually six months from land settlement.

Some lenders participating in the scheme will only finance packages where the land has already settled or is about to settle, effectively ruling out off-the-plan purchases with extended settlement periods. Checking whether your chosen lender accepts your specific package structure before you sign contracts prevents costly delays or the need to restructure your purchase.

Construction Draw Payments and Your Cash Flow

The builder receives payment in stages as construction progresses, not as a lump sum at the start. Your lender releases funds at each stage based on an independent progress inspection. You don't need to hold additional cash for these payments, the lender manages the drawdown from your approved loan amount.

Typical progress payments follow a structure like this: 5% at slab down, 15% at frame stage, 25% at lockup, 20% at fixing stage, and the final 35% at practical completion. These percentages vary by builder and lender, but the principle remains the same. Your loan sits partly drawn during construction, which means you're paying interest only on the amount released to the builder so far, not on the full loan amount.

If you've arranged a home loan pre-approval based on the full package price, confirm that your lender allows interest-only payments during construction. Most do, but the interest-only period and how it's structured into your overall loan term should be clarified before the land settles. Some lenders automatically convert to principal and interest repayments once construction completes, while others allow you to nominate when that switch occurs within set parameters.

Regional First Home Buyer Guarantee and Package Purchases

The Regional First Home Buyer Guarantee expands eligibility for the scheme to properties in regional areas, with higher income thresholds and more places available compared to the standard scheme. House and land packages in regional locations often fall within the price caps, making this an accessible option for paediatric nurses working outside metropolitan areas.

Income limits for the regional scheme sit at $125,000 for individuals and $200,000 for couples, which accommodates most nursing salaries even with shift penalties and overtime included. The property price cap varies by location but extends up to $600,000 in many regional centres. If you're purchasing a package in a regional area where paediatric services are located, such as larger rural hospitals or regional health hubs, this scheme can remove the LMI cost entirely while keeping your deposit at 5%.

Your builder must still meet the lender's panel requirements, and the construction timeline must align with the scheme's conditions. Regional packages sometimes involve longer build times due to contractor availability or weather delays, so building a buffer into your construction timeframe reduces the risk of falling outside the scheme's completion window.

Lenders Mortgage Insurance and Paediatric Nurse Discounts

Several lenders waive or reduce LMI for nurses and midwives purchasing with deposits between 5% and 10%. These LMI waivers for nurses apply to house and land packages, though the lender will assess both your employment status and the package structure before confirming the waiver.

LMI waivers for healthcare workers typically apply to loans up to $1,000,000 for established properties, with some lenders extending this to $750,000 for house and land packages. The reduced cap reflects the additional risk lenders associate with construction timelines and builder performance. If your package sits within the eligible loan amount and you're employed in a permanent paediatric nursing role, the LMI saving can reach $20,000 or more compared to a standard borrower with the same deposit size.

You'll need to provide evidence of your nursing registration and employment contract. Some lenders accept conditional waivers during pre-approval, while others require final employment verification before land settlement. Confirming the documentation requirements during your home loan application process keeps your settlement timeline on schedule.

Offset Accounts During Construction

Most variable rate home loans include an offset account, but its value during the construction phase depends on how your lender structures progress payments. If you're paying interest only on the drawn portion of your loan, any balance in your offset account reduces the interest charged on that amount.

Consider a scenario where the builder has drawn $150,000 so far and you're holding $10,000 in your offset account. You'll only pay interest on $140,000, which can save several hundred dollars over a six-month build period. Once construction completes and the full loan amount is drawn, the offset account functions as it would for any other home loan, reducing interest on the full balance based on your deposited funds.

Fixed rate loans generally don't offer offset accounts, so if you're weighing up a fixed interest rate for certainty during construction, factor in the loss of offset functionality. Some lenders allow a split structure where part of your loan is fixed and part remains variable with an offset attached, though this adds complexity to your repayment setup.

Call one of our team or book an appointment at a time that works for you. We'll walk through your house and land package contract, confirm which deposit schemes and LMI waivers apply to your situation, and structure your loan to match the construction timeline.

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