Australian Property | Cost of Buying a House and Land Package in Australia (Updated 2022)
1. Reserve a property
Once buyers have selected the land and house they are happy with, they need to pay a holding fee (usually A$1,000 – A$5,000), which allows the agent to apply to the developer to reserve the land. Before the contract is signed, if buyers change their mind about the purchase, this holding fee is refunded in full; if the contract is signed, the holding fee forms part of the deposit. For overseas buyers, Aobo Realty will assess financial capacity in advance to determine the type of house and price range that can be purchased.
2. Sign the land contract and building contract1. Reserve a property
Once buyers have selected the land and house they are happy with, they need to pay a holding fee (usually A$1,000 – A$5,000), which allows the agent to apply to the developer to reserve the land. Before the contract is signed, if buyers change their mind about the purchase, this holding fee is refunded in full; if the contract is signed, the holding fee forms part of the deposit. For overseas buyers, Aobo Realty will assess financial capacity in advance to determine the type of house and price range that can be purchased.
The developer provides the purchase contracts to the buyer or the buyer's solicitor. The buyer signs after consulting their own solicitor and fully understanding the contracts; at the same time, the developer also signs the purchase contracts and provides the buyer with a copy signed by both parties, at which point the purchase contracts take effect.
3. Apply for FIRB approval
Overseas buyers submit a purchase application to Australia's Foreign Investment Review Board (FIRB). This step applies only to overseas buyers. The buyer needs to complete an application form and submit it to the FIRB for review, a process usually assisted by the buyer's solicitor.
4. Pay land and building deposit
Within the timeframe specified in the contract (usually 14 calendar days), the buyer needs to pay 5% – 10% of the land amount as a deposit. This payment must be made into the trust account of the developer's solicitor. At the same time, a 5% building deposit is paid into the builder's nominated account. Clients who require finance must have sufficient funds to complete the land settlement and apply for a construction loan; Aobo Realty can assist throughout the entire process.
5. Land settlement
After the land title has been registered, the land settlement process takes place. The buyer pays the balance of the land amount and the land stamp duty, at which point the land title is transferred into the buyer's name. This process is completed independently by the developer's and the buyer's solicitors.
6. Builder arranges building approval and prepares to start construction (apply building permit)
After receiving confirmation that the land transfer to the buyer has been completed, the builder needs to arrange the relevant building approvals and carry out preparation work. This process usually takes around one month.
7. Start building and pay by installment
The construction of an Australian house is mainly divided into five stages: slab, frame, lock-up, fixing and complete. The building contract sets out in detail the amount payable at the end of each stage. At the end of each stage, the builder carries out an inspection of that stage of construction and issues the corresponding invoice; once the inspection is passed, the buyer needs to pay the builder the amount for that stage in accordance with the contract.
8. Final inspection
After the house is completed, the developer will invite the buyer or the buyer's representative to inspect it. Any issues found during the inspection will be recorded, and the developer will then arrange for them to be rectified. If any issues arise with the house within three months of settlement being completed, the developer will also be responsible for prompt repairs. Under Queensland property law, the structural warranty period for a property is 6 years.
9. House handover
On the day of settlement, the buyer needs to pay the balance of the purchase price to the developer, after which the buyer can move into their new home. For overseas buyers who require it, there are professional property management agencies in Australia to manage the property, including leasing, maintenance and more.