One of the first steps in buying a house and land package is to ask a bank or lender how much you can borrow. Be sure to include other costs such as, legal and conveyancing fees, home loan fees and stamp duty (for the land portion) in your budget. You may be eligible for NSW Government grants and assistance schemes to help you buy your home. 

Next, work out what you can afford to spend by adding the amount you have saved to the amount the bank will lend you.  

To avoid paying Lenders Mortgage Insurance (LMI), you need to have saved at least a 20% deposit of the property’s value. This is the amount typically required for banks to understand you are not a high-risk borrower. LMI is a non-refundable fee that protects the lender and is paid at settlement or added to your loan.  

It may not be achievable for you to save 20% for a land loan deposit. However, it can still be possible to take out a land loan if your deposit is less than 20%, but you will need to pay LMI. The lower your deposit percentage, the higher the LMI fee will be and the longer your loan will take to pay off.  

Once you’ve worked out your borrowing limit, you should submit a home loan application and receive pre-approval from your nominated bank. . When pre-approval has been given, it will provide you  an indication of the amount the bank will lend you based on the deposit you have saved, your income and broader financial situation. However, it is not a guarantee that the bank will approve your finance. Pre-approval usually lasts for 90 days, so remember to check this with your bank. 

Financing a new home usually involves two key steps:  

Buying land and then finding a builder to build your house. Buying a house and land package turns this into a single process, although you will still have two separate contracts—one to buy the land, another for the build. Your bank will also treat the loan as two separate contracts.  

Delays in one contract can impact costs in the other contract. For example, the price of building materials may rise while you wait for land settlement.  

Look out for building contract clauses that apply automatic price increases if council approval is delayed. You should seek legal advice to ensure you fully understand the terms of your contracts. A financial adviser can also help you work out your costs, understand your borrowing capacity and organise the correct loans.  

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There are various ways to buy a house and land package in NSW: 

• buy a block of land in a registered subdivision and then choose the type of house you want to build from several standard or customisable home designs 
• buy a proposed lot in an unregistered residential subdivision that is sold 'off the plan’ and will be developed into a housing estate  
• buy a block of land containing a newly built house from a builder or developer. 

Developers can sell blocks of land in two ways:  

• as a block of residential land in a registered subdivision that has passed through local council approval processes and has a separate legal title 
• as a proposed block of land in a plan of subdivision that will be registered before settlement (‘off the plan’). 

If the block of land has a separate title, check that a surveyor has measured and pegged the boundaries of the land. 

It’s a good idea to search for planning information, hazards and legislative requirements about the block on the NSW Planning Portal's Spatial Viewer.  

You can also use the property summary report in the myHome Planner by entering the address, lot or DP number of your selected block of land. 

You should also try to learn more about the limitations of the block and any laws for building on it, such as: 

• estate covenants  
• minimum green space requirements 
• biodiversity requirements 
• percentage of land a building can occupy 
• tree preservation orders, or trees that need removing  
• underground utilities and infrastructure provisions, such as sewerage, electricity, gas, water and telecommunications 
• any required excavation  
• any drainage and stormwater issues  
• issues that may affect the build cost such as bushfire and flood risks 

Some of the above limitations and laws will be evident from documents attached to the land contract. You can contact the local council, a conveyancer or solicitor to understand the restrictions imposed on developing the land and the development application process.  

Learn More

• Spatial viewer | NSW Planning Portal 

After finding a block of land, you may need to pay a non-refundable reservation fee to secure the property. This is usually a few hundred dollars and reserves your interest in the block of land. This is not the deposit you will be required to pay when you exchange contracts to buy the land (see 1.8 Exchange of contracts and pay land deposit below).   

You may need to provide contact details for a solicitor or conveyancer when the developer issues the sales contract. 

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Bank valuations are a crucial part of the application process. A valuer will assess the land to determine its worth, which may help in providing an estimate on how much the lender will loan you. Valuation of the land can only happen once the plan of subdivision creating the block of land is registered. 

Bank valuations are often an estimate of the property's value because the bank assumes it may need to sell the property swiftly to recover losses.  

The sale of land contract is prepared by the developer and will generally contain special conditions in their favour. It is important to engage a conveyancer or lawyer specialising in property transactions to review the contract and negotiate the conditions before you sign anything. Once you sign and exchange land contracts, it is generally too late to change any of the conditions.   

As sale of land contracts and build contracts are often treated interdependently for house and land packages, you should be seeking legal advice on both contracts. You can use the Law Society of NSW’s Register of Solicitors to find an appropriate solicitor.  

Buyers and sellers of land are not legally bound by an agreement until there is a formal ‘exchange’ of contracts. This process involves two identical copies of the land contract: one signed by you, and one signed by the developer. The ‘exchange’ happens when you receive the contract signed by the developer, and the developer receives the contract you have signed. The contracts are then dated to confirm that it is now legally binding. 

A deposit, usually around 10% of the purchase price of the land, must be paid when exchanging contracts. For off the plan contracts, this deposit is held by a real estate agent, solicitor or licenced conveyancer, and cannot be released to the developer before settlement.  

Note: the amount paid at the contract exchange is not the same as your bank or lender’s requisite of a 20% deposit. This is the threshold deposit amount to avoid paying Lenders Mortgage Insurance, required by most banks.  

Settlement is when you pay the remaining balance purchase price for the land and, in return, the developer transfers legal title to the block of land into your name. This means you (through your conveyancer or solicitor) will pay the remaining deposit amount, alongside the loaned balance from your bank. You now become the owner of that block of land. To reach settlement, the plan of subdivision must have been registered and the block of land must have its own title.  

When you are buying land in a registered subdivision, settlement usually takes place 42 days (6 weeks) after you have exchanged contracts, with the funds coming from your bank. This time can vary depending on what you have agreed with the developer. 

Before you settle on a home design, check if your preferred builder has a valid contractor licence at Service NSW. If you cannot find it, contact Fair Trading to confirm that the company holds a contractor licence.  

Choosing a qualified and licenced builder is an essential step—your home must meet safety standards and legal requirements.  

You can also: 

• research companies through ASIC Connect and ABN Lookup searches 
• check whether they have an iCIRT rating (a register of trustworthy contractors) 
• check the NSW Fair Trading complaints register 

All builders require home building compensation cover for work over $20,000. This helps homeowners if the builder is unable to complete work or fix defects because of insolvency, death, disappearance or licence suspension.  

If your house and land package allows you to (i.e. it is not a turnkey package), it is now time to choose a home design that works well on your site and fits in with council planning controls. The property developer or agent who sold you the land will most likely work with several building companies to offer a range of designs to choose from. Do your homework and make sure you choose a reputable builder with a proven record for building top-quality homes.  

The type of house you build should suit your lifestyle and climate, while making the most of the slope, access and any trees on site. A good home design is orientated to maximise light, natural breezes and views. It should also incorporate passive design principles to reduce the need for additional heating or cooling.  

 All new home builds in NSW must meet Building Sustainability Index (BASIX) standards. BASIX ensures homes stay comfortable year-round by setting higher thermal performance, water and energy standards. You must complete a BASIX assessment and receive the BASIX certificate before you (or your builder) submit a development application or complying development application.  

Once you have narrowed down a few house designs, organise a tour of exhibition homes at display villages or visit previous build sites to get a better sense of the design and quality on offer.  

Some essential questions to ask the building company include: 

• How long have you been in the industry? 
• What sort of guarantees do you offer? 
• Do you have home building compensation cover? 
• What is included in the price? 
• How long will my design take to build? 
• Will my build be considered complying development or require a development application? 
• Can I get a custom design or change any features? 
• Can you offer any financial incentives? 

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Once you have decided on the house you want to build (applicable to non-turnkey house and land packages), your builder may ask you to enter into a preliminary agreement. This is also known as a tender fee, preliminary quote, preliminary contract or pre-services agreement. It cannot be an agreement that involves residential building work. 

This agreement will allow the builder to coordinate initial assessments of your site prior to designing plans or submitting applications.  

Given the time and effort involved in these assessments, there’s usually a preliminary assessment fee charged for the agreement. Fees will depend on your builder, your land and chosen property. Check the cost and inclusions of these fees with your builder. 

Be wary of developers that ask you to sign a sales contract for land sold off the plan and pay a new home tender fee at the same time. This is not considered good practice. 

Learn more

• Preliminary contracts in residential building work | NSW Fair Trading 
• Common site assessment reports | NSW Planning Portal 

A quote considers your build site, particularly the soil conditions and slope of your block, BASIX standards and zoning (biodiversity requirements, flood and fire risk, and development guidelines). 

Ensure you look closely at what is and is not included in the package and be mindful that there are often additional costs involved in build projects, including planning approval application fees, variations to designs and unforeseen delays. If your contract is not a fixed price, the cost of labour and materials can increase throughout the project. You will need to allow a buffer for this in your budget. 

There are no uniform laws in Australia that govern standard building quotes, but it is wise to check if your quote includes the following items: 

• electrical fittings 
• bathroom fixtures 
• driveways 
• landscaping 

To get your construction loan unconditionally approved, you will need to show your bank or lender: 

• your building contract with a licensed builder, including proof the builder has insurance that is current for the construction period 
• your plans and specifications for the proposed house. 

Unconditional approval is the formalised approval decision a bank or lender makes when they are satisfied that you qualify for the construction loan. This is also referred to as ‘formal approval’ or ‘full approval’ and means your loan is approved and is not subject to further approval conditions.

Working drawings are a critical part of the design and construction process. You will need working drawings when you apply for development consent.  

Working drawings contain essential information about the size, shape and location of all parts your home, including: 

• the type of materials  
• information about easements, setbacks and topography 
• information about code compliance 
• the footprint of the building 
• location of driveways and any other buildings 
• floor plans 
• foundation plans 
• roof framing plan 
• electrical plans 
• sectional views 
• levels and elevation surveys. 

When your working drawings are ready, the builder will prepare a home building contract, which is governed by the Home Building Act 1989. 

The build contract must include a description of the proposed works, and specifications of the build. The construction loan deposit amount must not exceed 10% of the contract price. Remember, the construction loan deposit is separate from your land loan deposit.  

Your builder will provide you with a written contract detailing what is (and is not) included in your build. This is a legal agreement binding you and the builder to the construction of your new home. It ensures both parties have agreed on the build expectations, cost and time frame.  

Before you sign, check the following: 

• Is the entity marketing the house and land package the same entity that is contracting to do the build? If not, what is the relationship between the entities and who will you be dealing with – the developer or the builder? 
• Are the land and build contracts interdependent? If so, what happens to the build contract if the sale of land falls through?  
• The contract is between the parties to the contract, so what is the rationale for having a third party?   
• If there is a contract dispute, it will be with the contracting entity, not the developer.  How will this be managed? 

Your builder must give you a certificate of home building compensation cover (HBC) before entering into a residential building work contract for any agreement that costs more than $20,000, including GST. The builder must pay for the HBC. They cannot ask you to pay any money until they give you the HBC certificate.  

It is also mandatory for your builder to supply you with a copy of the Consumer Building Guide and the contract checklist before entering into a residential building work contract that costs more than $5,000. 

The builder will create detailed drawing plans and specifications for your house once they receive the reports back from any specialists they consulted. 

Detailed plans give you more in-depth information about the placement and connections between different parts of your home. An architect or building designer might create detailed plans for: 

• door frames 
• staircases 
• material connections, such as where a column meets the foundation 
• cornices, or decorative features near the top of a wall 
• window frames 

Your house package will include certain fittings and fixtures as part of the base price. Make sure you understand exactly what is included in a standard package and where, or if, you can upgrade. 

Choosing the colour palette of your home is an important design decision. You may wish to engage a colour consultant to help you choose colours that complement your home, its surrounds and your lifestyle, along with fittings and fixtures that work well in each space and add to the overall look and feel. 

Fittings are freestanding items in your home, including furniture, certain appliances and décor. Fixtures are permanently attached to your home, including ceiling fans, electrical power points, toilets and sinks. Investing in quality fixtures and fittings for high touchpoints, such as door handles and taps, will help these items withstand daily wear and tear. 

Some fixtures are more sustainable and environmentally friendly than others, so you need to consider which ones will help you receive your BASIX certificate, which you will apply for before you lodge a development application (DA) or a complying development certificate (CDC).  

If final home design details change—such as changed materials or number of windows—after your DA or CDC is submitted, you may need to lodge a revised BASIX certificate. More on development pathways and approvals are covered in the Approve phase.  

Learn more 

• Increase to BASIX Standards | NSW Planning Portal