6 Key Benefits of House and Land Packages For Investment

House and land packages are one of the easiest (and cost-effective) ways to purchase a new property in Australia - both the property and the block of land are secured in one transaction.

The simplified process makes house and land packages especially popular with first-time homeowners, as well as an increasing number of property investors looking for a way to maximise the overall value of their investment. 

With benefits ranging from depreciation claims to a higher potential for long-term capital growth, house and land packages are a sound investment choice that may be more appealing than buying an established property.

6 Benefits of Investing in a House and Land Package 

1. Save on stamp duty cost

Investing in an established home requires investors to pay stamp duty on both the land and the built property.

With a house and land package, however, stamp duty is only payable on the value of the land. The stamp duty on the house is not payable, as the property has not yet been built, resulting in significant savings for investors. Investors can save up to tens of thousands of dollars on stamp duty, depending on the value of the house.

For example, the stamp duty payable on an investment property in Queensland valued at $700,000 is $24,525. By purchasing a house and land package with a similarly valued home component, investors can avoid paying this cost altogether.

2. Claim depreciation for tax benefits

Depreciation claims are used to offset the loss in value of an investment property due to natural wear and tear. Choosing a house and land package allows investors to make bigger depreciation claims, and for a longer period compared to an established property.

As the property of a house and land package is completely new, investors can claim depreciation on the construction of the building as well as plant and equipment depreciation on fixtures such as carpets, furniture, appliances, and air conditioning. These claims can be used to lower the taxable income of investors come tax time.

3. Lower maintenance costs

Maintenance costs are an ongoing cost of investment. As the property ages, it will require repairs to ensure proper upkeep. 

New properties built from a house and land package are less likely to require frequent maintenance and repair compared to an established property with aging components. Fewer property maintenance costs translate to lower ongoing investment costs and higher subsequent returns for investors. 

4. Attractive to tenants

Newly built properties are more attractive to potential renters, which drives up rental demand. Aside from the obvious benefit of living in a new home, tenants are also drawn to the appeal of modern appliances and the property's improved energy efficiency, which reduces utility costs.

Investing in a house and land package allows investors to enjoy higher rental demand for the property and more consistent rental returns over time. Depending on the housing supply of the local area, the new property may also be able to fetch higher rent prices.

5. Located in high-growth areas

Builders and developers generally offer house and land packages within a focused area that is slated for future development. Examples of planned work within the region may include new shopping centres, community facilities, roads, and public transport links - all of which increase the appeal and accessibility of the property once it is fully built.

As the area around the investment property develops, its value will also increase, resulting in capital growth that investors can receive if the property is sold.

6. Lower upfront costs

As house and land packages are located in developing areas, they are typically priced much lower in comparison to properties in established neighbourhoods. This means that property investors can access house and land packages at a lower investment, while obtaining a property that is considerably bigger than an established home at the same price. 

For example, the median price of a 3-bedroom home in a developing area like Bohle Plains, Townsville, is $579,000. A similar-sized property in Wynnum, Brisbane, would cost $1,030,000 or higher.

The key to investing in a house and land package that delivers on these benefits is to work with a local investment builder that knows the state of the region’s market. Unlike regular builders, an investment builder’s house and land packages are designed to maximise the return on investment on top of delivering a high-quality home. Builder Direct offers a range of house and land packages in Townsville for investment, backed by market research and insights. Get in touch with us today to find out how you can build your next investment with us.