---
title: House and Land vs Established Home in Melbourne | GNT Finance
description: Compare a house-and-land package with an established home in Melbourne's north: duty on land only, the $10,000 grant, construction loans and site costs in 2026.
url: https://gntfinance.com.au/guides/house-and-land-vs-established/
section: guides
updated: 2026-09-01
author: Gorakh Timilsina, GNT Finance
---

# House and land packages versus established homes: which is right for you

**In short:** A house-and-land package in Victoria usually costs less upfront than an established home at the same price, because stamp duty is charged on the land only and the $10,000 First Home Owner Grant applies to the new build. The trade-off is a 6 to 12 month build, a construction loan drawn in stages, and site costs and upgrades that can add $20,000 to $50,000 to the advertised price.

Drive north from Craigieburn through Mickleham, Kalkallo and Donnybrook and you pass thousands of new lots alongside established streets from the last two decades. Buyers in this corridor face a genuine choice between building and buying, and the finance, tax and timing differ more than most people expect. This guide sets both options side by side with 2026 figures so you can decide on numbers rather than display-village charm.

## The upfront cost comparison

The example below compares a $700,000 house-and-land package in Mickleham (land $320,000, build $380,000) with an established $700,000 house a few streets away.

| Cost | House and land, $700,000 | Established, $700,000 |
|---|---|---|
| Stamp duty, general owner-occupier | $14,270 (on $320,000 land only) | $37,070 |
| Stamp duty, eligible first home buyer | $0 (land under $600,000) | approx. $24,713 |
| First Home Owner Grant | $10,000 | Not available |
| 10% deposit | $70,000 | $70,000 |
| Conveyancing (two contracts) | $1,800–$3,000 | $1,200–$2,500 |
| Building and pest inspection | Not needed (new build); independent stage inspections optional $300–$600 each | $400–$700 |
| Site costs, upgrades, fencing, landscaping, driveway | $20,000–$50,000+ | Usually included in price |
| Rent during build (9 months at $2,300) | approx. $20,700 | $0 |
| Construction-period interest (interest-only on drawn funds) | approx. $8,000–$12,000 | $0 |

For a first home buyer the difference in duty and grant alone is around $34,700 in favour of building. Once you add site costs, rent and construction interest, the gap narrows sharply and can reverse. For a non-first-home buyer the duty saving is about $22,800, against the same extras. In other words, the house-and-land advantage is real but is largely spent on the process of building, and the decision should rest on what you actually want to live in.

Run your figures on the [stamp duty calculator](/calculators/stamp-duty/) and the [upfront costs calculator](/calculators/upfront-costs/).

## Why duty is charged on the land only

When you buy a house-and-land package with two separate contracts, one for the land with the developer and one for the build with the builder, the State Revenue Office assesses duty on the land contract only. The build contract is a contract for services, not a transfer of land. On a $320,000 Mickleham lot the general duty is $2,870 plus 6% of $190,000, which is $14,270; for a first home buyer it is nil because the land is under $600,000.

Be careful with two variations:

- **Single contract for completed home.** If a builder or developer sells you a completed or nearly completed house on one contract, duty is on the full price, less any off-the-plan concession for construction not yet done.
- **Land already titled and built on.** A "turnkey" spec home already finished is assessed on its full value.

Details in [stamp duty exemptions and concessions in Victoria](/legal/stamp-duty-exemptions-and-concessions-victoria/).

## How the finance works for each

### Established home

One loan, one settlement. You get pre-approved, sign a contract subject to finance, the lender values the property, formal approval follows in 2 to 10 business days, and you settle 30 to 90 days after contract. Full principal-and-interest repayments start the month after settlement. See [home buying process step by step](/guides/home-buying-process-step-by-step/).

### House and land

Two contracts and a two-part loan:

1. **Land settlement.** The land loan settles first, typically 14 to 90 days after the land contract, or later if the land is not yet titled. You start paying interest on the land portion immediately.
2. **Construction loan.** The lender approves the build contract and plans, then releases funds in progress payments as each stage is certified: base or slab, frame, lock-up, fixing and completion. Interest is charged only on what has been drawn, usually interest-only during construction.
3. **Completion.** The final payment is released after the occupancy certificate and the lender's final inspection. The loan converts to principal and interest and you move in.

The [construction loans](/services/construction-loans/) page and our guide on [construction loan progress payments](/guides/construction-loan-progress-payments/) explain each stage.

### Worked example: $650,000 house-and-land in Wollert

Deepak and Sita buy a $270,000 Wollert lot and sign a $380,000 fixed-price build contract. They are first home buyers with $45,000 saved and use the First Home Guarantee for a 5% deposit.

| Stage | Amount | Timing |
|---|---|---|
| Land settlement, 95% loan on $270,000 | $256,500 drawn | Month 0 |
| Stamp duty on land | $0 (first home buyer, under $600,000) | Month 0 |
| Slab stage (15% of build) | $57,000 drawn; FHOG $10,000 applied here | Month 2 |
| Frame (20%) | $76,000 drawn | Month 4 |
| Lock-up (35%) | $133,000 drawn | Month 6 |
| Fixing (20%) | $76,000 drawn | Month 8 |
| Completion (10%) | $38,000 drawn | Month 9 |
| Total loan fully drawn | $617,500 | Month 9 |
| Interest-only during build (illustration at 6.00% p.a., average drawn balance) | approx. $12,000 total | Months 0–9 |
| Principal and interest repayments after completion | approx. $3,703 per month | Month 10 onwards |

Their $45,000 covers the 5% deposit ($32,500), conveyancing, lender fees and a $9,000 buffer for site works. The $10,000 grant reduces the slab-stage draw so they borrow slightly less than the package price. Location context is on our [Wollert](/mortgage-broker/wollert/) page.

## What the advertised package price often leaves out

Display-village pricing is a starting point. Before you sign, get a written list of what is and is not included:

- **Site costs.** Soil classification, rock, fill, retaining, drainage. Fixed-price contracts often include a site-cost allowance, but only after a soil test.
- **Developer requirements.** Some estates mandate fencing styles, driveway materials, landscaping to the front boundary and even facade colours, at your cost.
- **Services connections.** Sewer, water, NBN, gas and electricity connections beyond the boundary.
- **Flooring, window coverings, driveway, letterbox, clothesline.** Frequently "optional" in base packages.
- **Upgrades.** Kitchen stone, higher ceilings, ducted heating and cooling, extra power points.
- **Bushfire or overlay requirements.** Parts of the northern growth corridor have overlays that add construction cost.

A realistic all-in figure is the package price plus $20,000 to $50,000. Lenders will finance upgrades if they are in the signed contract and supported by the valuation; variations after contract are usually your cash.

## Timing and what it means for you

| Factor | House and land | Established |
|---|---|---|
| Time to move in | 6 to 12 months after land settlement; longer if land is untitled | 30 to 90 days after contract |
| Untitled land | Titles can take 6 to 18 months; build cannot start until then | Not applicable |
| Price certainty | Fixed-price build contract, but check the fixed-price period (often 90–180 days from contract) | Known at contract |
| Rate risk | Rates may rise during the build; loan converts at completion | Rate set at settlement |
| Living costs during wait | Rent or family accommodation | Move straight in |

Untitled land is the timing wildcard. Developers sell lots ahead of civil works, and if titles slip, your build contract's fixed-price period can expire, exposing you to price rises. Ask the developer for the expected title date in writing and check your build contract's provisions.

## Ongoing costs and lifestyle

**New home advantages:** builder's warranty, seven-star energy rating, lower maintenance for the first decade, modern layout, depreciation benefits if it later becomes an investment. Newer estates in Mickleham and Kalkallo are still building shops, schools and stations, so allow for driving.

**Established home advantages:** established gardens, larger blocks in older parts of Craigieburn and Roxburgh Park, proximity to existing train stations and schools, and a known neighbourhood. Budget for a roof, hot water, wiring and appliances that may be 20 years old; a building and pest inspection is not optional.

Investors should read [investment property guide](/guides/investment-property-guide/) for how depreciation and land tax interact with new versus established stock.

## Which option suits which buyer

**Build if:** you qualify for the $10,000 grant and duty savings, you can wait a year, you have somewhere affordable to live meanwhile, you want a specific floor plan, and you have a $20,000 to $50,000 buffer for extras.

**Buy established if:** you need to move soon, you want an established area with infrastructure, you are not a first home buyer (the duty gap is narrower), you prefer a larger block, or your finances cannot carry rent plus construction interest for a year.

**Consider off the plan if:** you want new without managing a build; see [buying off the plan](/guides/buying-off-the-plan/).

## Checklist for a house-and-land purchase

- [ ] Land title status and expected title date in writing
- [ ] Soil test and site-cost allowance confirmed before contract
- [ ] Written inclusions list, with developer requirements costed
- [ ] Fixed-price period long enough to cover the expected title date
- [ ] Build contract reviewed by a conveyancer or solicitor
- [ ] Builder's domestic building insurance certificate sighted
- [ ] Lender has approved both the land and construction components
- [ ] Grant application lodged through the lender
- [ ] Rent and construction interest budgeted for the build period
- [ ] Independent stage inspections booked (optional but wise)

## Common mistakes

- **Comparing package price with established price.** Compare all-in costs, including site costs, rent and construction interest.
- **Signing the land contract before the build contract is finalised.** If the build price rises, you own land with no fixed-price home to put on it.
- **Letting the fixed-price period lapse** while waiting for titles.
- **Assuming the grant arrives at land settlement.** It is usually paid at the first progress payment, so you need to fund the land deposit yourself.
- **Getting a land-only loan** and hoping to add construction later. The lender needs to approve both components together, and a second application later may fail.
- **Skipping inspections because the home is new.** Independent stage inspections catch frame and slab issues that are expensive after lock-up.
- **Ignoring estate covenants** that dictate fencing, facades and landscaping deadlines.

## Frequently asked questions

### Do you pay stamp duty on house and land packages in Victoria?

Yes, but only on the land, when the land and build are separate contracts. Duty is not charged on the building contract because it is a contract for construction services rather than a land transfer. On a $320,000 Mickleham lot, general duty is $14,270; an eligible first home buyer pays nothing because the land value is under $600,000. If you buy a completed home on a single contract, duty applies to the full price.

### Is it cheaper to build or buy an established home in Melbourne?

Upfront, building is usually cheaper for a first home buyer because of the duty saving and the $10,000 grant, worth around $34,700 combined on a $700,000 purchase. Over the build period you then pay rent, construction interest and extras that can absorb most of that. For non-first-home buyers the gap is smaller. The right answer depends on how long you can wait and how much you value a new home.

### How does a construction loan work for a house and land package?

The land settles first with a normal loan. The construction portion is approved against the fixed-price build contract and released in five or six progress payments as each stage is certified by the lender's valuer. You pay interest only on the amount drawn during construction, and the loan converts to full principal and interest repayments once the home is complete. Total interest during a nine-month build on a $650,000 package is roughly $10,000 to $12,000.

### Can I use the First Home Guarantee for a house and land package?

Yes. The Home Guarantee Scheme covers house-and-land packages and land with a separate build contract, provided the total price is within the cap ($950,000 in Melbourne and Geelong) and you meet the eligibility rules. Construction usually needs to begin within a set period after the land settles and finish within a set time, so confirm the timelines with your lender before committing. See our [First Home Guarantee guide](/guides/first-home-guarantee-5-percent-deposit/).

### What are site costs and how much should I budget?

Site costs are the works needed to prepare your particular block: soil treatment, rock removal, cut and fill, retaining walls, drainage and service connections. They vary by lot and cannot be fixed until a soil test and survey are done. Many builders include an allowance, but overruns are your cost. In the northern growth corridor a sensible budget is $15,000 to $35,000 on a flat lot and more on sloping or rocky sites.

### What happens if the land is untitled when I sign?

You can sign a land contract before titles issue, but settlement cannot occur, and construction cannot start, until the plan of subdivision is registered. That can take 6 to 18 months. Make sure your build contract's fixed-price period will still be current when titles arrive, ask the developer for a written estimate of the title date, and check the land contract's sunset date and what happens if it passes.

## Talk to GNT Finance

Based in Mickleham, we finance house-and-land packages across Melbourne's north every week and know the estates, the builders and the lenders that handle construction well. We'll compare building against an established purchase on your numbers, in English, Nepali or Hindi. [Book a free consultation](/contact/) or call 0426 403 703, or see our [house and land packages](/services/house-and-land-packages/) service.

*This page is general information only and not legal, tax or financial advice. Laws change — confirm current rules with the State Revenue Office, the ATO or a licensed professional.*