How to purchase a brand new property

There are two general ways to purchase a new property, according to Loan Market experts - buying off the plan or buying a house and land package.

Buying off the plan

Buying off the plan is usually purchasing a unit or townhouse that has yet to be completed. Or in some cases, a single contract purchase, where you are not making progress payments on the construction of the loan.
When purchasing off-the-plan you have to put a 5-10% deposit and then pay the remainder on completion of construction. In most cases, buyers will organise the loan they need for the property in the months before they anticipate construction to be completed on the property.

Things you need to know about buying off the plan:

• You will have to pay stamp duty on the full contract price when you agree on the purchase price.
• Most builders have to pay stamp duty on the land they are building on so they may factor that into the total price of the property, meaning you may be paying stamp duty twice.
• Depending on the state you live in and the property price, you may be eligible for government grants and concessions. See our stamp duty calculator for the latest offers in your state.
• The contract or agreed price you pay is for the final completed product, unlike buying off the plan where you are paying in installments to complete the property to your specifications.
• When you buy a property off the plan you may have limited say in the construction of the property and its features - rooms, layouts, colours etc.

Buying a house and land package

When you buy a house and land package you are buying the land from the developer and you sign construction contract with a builder to complete your home.

When you buy the land, you have to pay for it upfront and will have to pay stamp duty on the land. However this will be the only time you will need to pay stamp duty. During construction of your property you will have to make progress payments to your builder of choice and these can be financed through several ways.

Things you need to know about buying a house and land package:

• House and land packages give you more say in the final product - builders will construct your home based on your ideal property layout and features.
• Stamp duty is only applicable on the land.
• You can often save lots of money by ‘acting as the developer’ and paying to complete the construction of the property rather than agreeing on a price for a delivered final product.