House and Land Package Finance Perth

Why Perth is the right market for house and land right now

Perth has a functioning builder market with active house and land estates across the northern and southern growth corridors. Alkimos, Brabham, Ellenbrook and Butler in the north. Baldivis, Wellard, Byford and Harrisdale in the south. Land prices at these price points are lower than established suburbs, build times have stabilised after the post-COVID delays, and the range of builders working in these corridors gives buyers genuine choice.

The policy settings have also moved in favour of new construction. The First Home Owner Grant of $10,000 applies only to newly built homes. Under current WA law, the stamp duty free threshold for first home buyers is $500,000 for homes and $350,000 for vacant land, with concessions above those levels depending on property type and location. The federal government announced changes on 12 May 2026 to the negative gearing treatment for established residential investment properties, with new construction proposed to remain fully exempt under those changes, subject to legislation passing Parliament. And the First Home Guarantee allows eligible buyers to purchase with a 5 percent deposit and no lenders mortgage insurance.

All of those things point in the same direction. If you are buying your first home or building your first investment property, a house and land package is worth understanding properly before you rule it out.

How the finance actually works: the two-contract structure

This is where most buyers get confused. A house and land package is not a single transaction. It is two separate legal contracts handled in sequence, and each one has its own finance requirements.

1. Land purchase contract The land settles like a standard property purchase. You need your deposit available at this point. The bank advances the land purchase price and you begin making repayments. The First Home Owner Grant does not arrive here. It comes later.
2. Building contract Once the land has settled, the construction loan activates. Funds are released progressively as each build stage is completed and inspected by the lender's valuer. You pay interest only on what has been drawn down, not on the full construction amount.
3. First construction draw (slab stage) The First Home Owner Grant is paid at this point. Not at land settlement. This is the most common point of confusion for first home buyers doing a house and land package. Your deposit for land settlement must come from savings, because the grant is not available yet.
4. Practical completion The build is finished, inspected and signed off. The construction loan converts to a standard principal and interest home loan. From this point, repayments work the same as any other mortgage.

The sequencing matters because the cash flow does not run in the order most buyers expect. A broker who has coordinated house and land packages before will plan the land settlement date, the construction drawdown schedule, and the FHOG timing as a single cash flow plan so nothing comes up short.

How much does a house and land package cost in Perth?

Perth house and land package prices vary by corridor, lot size, builder, inclusions and site conditions, so treat advertised package prices as a starting point rather than the final amount you need approved. Entry-level packages in growth suburbs are usually built around smaller lots, compact floorplans and standard inclusions. Mid-range packages add more land, larger designs, better finishes and more room for variations. Premium packages can move quickly once upgrades, larger blocks, higher site costs or more complex elevations are included.

The finance question is not just "Can I afford the advertised package?" It is "Can I afford the land, build contract, stamp duty on the land component, settlement costs, upgrades, contingency and repayments while the home is being built?" Before signing, run the full land-plus-build scenario through your borrowing position, then stress test the deposit needed at land settlement. Our borrowing capacity calculator is a useful first pass, but a construction pre-approval should confirm the exact structure before you commit to a lot or builder.

How long does the process usually take?

A typical Perth house and land package can take many months from land contract to keys. Land settlement often takes around 3 to 6 weeks once finance is approved and the lot is ready to settle. The build itself commonly takes 6 to 12 months, depending on the builder, design complexity, council approvals, weather, trade availability and whether the land is already titled. The finance approval and drawdown timing needs to match that sequence, because the lender must be ready at land settlement and again at each construction stage.

What lenders look at when you're building

A construction loan application involves more assessment than a standard purchase. The lender is not just looking at you. They are also looking at the builder and the contract.

The builder

Not every builder is accepted by every lender. Lenders assess builder registration, Home Indemnity Insurance (also called Home Warranty Insurance), the builder's financial standing, and whether the builder is on their approved panel. Some lenders maintain lists of builders they will not lend against. Submitting an application to a lender that does not accept your builder wastes time and creates unnecessary credit enquiries on your file. A broker checks this before the application goes in.

The contract type

Fixed price contracts are strongly preferred by lenders. A fixed price contract means the builder has locked in the total cost of construction and cannot charge you more without a formal variation. Cost-plus contracts, where the builder charges actual costs plus a margin, give lenders significantly less certainty over the final loan amount and are either declined or heavily restricted by most lenders. Most Perth volume builders work on fixed price contracts. If you are using a smaller or boutique builder, confirm the contract type early.

Home Indemnity Insurance

Home Indemnity Insurance (HII) is a WA requirement for residential building contracts over $20,000. It protects the owner if the builder becomes insolvent, dies, or disappears before the work is complete. Lenders require evidence of HII as part of the construction loan documentation. Your builder is responsible for obtaining it, but you should confirm it is in place before the building contract is signed.

Progress inspections

At each drawdown stage, the lender arranges an independent inspection to confirm the work has been completed to the required standard before releasing the next tranche of funds. This adds a small cost but provides protection for both the lender and the borrower. Delays in inspections can hold up drawdowns, which is why having a broker managing the process through the build matters.

Costs buyers often miss before they sign

The advertised package price does not always include every cost you will carry through settlement and construction. Site works can change once soil conditions, retaining, drainage, bushfire requirements or service connections are confirmed. Upgrades and variations can also lift the final contract price, especially when buyers move beyond standard inclusions for flooring, benchtops, electrical, air conditioning, elevations or outdoor works.

Lenders prefer fixed price contracts because they reduce uncertainty, but "fixed price" only applies to the agreed scope. If you choose variations later, or if a provisional allowance comes in short, you may need extra cash or a loan increase. A sensible finance plan leaves room for these costs instead of using every dollar of borrowing capacity on the advertised land and build price.

First home buyers: stacking the available support

For first home buyers in Perth, a house and land package is one of the few scenarios where multiple government schemes can be used simultaneously. Understanding how they stack is important because each one has its own eligibility rules and property limits.

The stamp duty thresholds were updated in March 2025. Under current law, the full exemption applies to homes up to $500,000 and vacant land up to $350,000. For homes, the concessional range extends to $700,000 in Metro and Peel, and to $750,000 in regional WA. A later May 2026 proposal would lift the home thresholds to $600,000 and $800,000, but it is not yet in effect. See our WA stamp duty guide for the current thresholds and proposed changes.

Keystart and the First Home Guarantee target the same problem (low deposit), so most buyers will use one or the other rather than both. Keystart is WA-specific and has income caps but can go lower on deposit requirements in some cases. The First Home Guarantee is federal and applies through a private lender. A broker will compare both options and identify which gives you the better outcome based on your income, purchase price and deposit position.

Investors: new builds and negative gearing

On 12 May 2026 the federal government announced changes to the negative gearing treatment for established residential investment properties, subject to legislation passing Parliament. Under the announced changes, properties held at the budget date would be grandfathered under the existing rules. For established residential properties purchased after 12 May 2026, rental losses would no longer be able to be offset against wage income from 1 July 2027. Those losses could still be used against other residential rental income or carried forward against future capital gains.

New construction is proposed to be fully exempt under the announced changes, subject to the same legislation. For investors weighing a new build against an established property, this changes the after-tax comparison materially if the legislation passes. A broker structures the finance. Speak to your accountant about the tax position before signing.

For investors considering a house and land package, the key finance considerations are deposit (typically 10 to 20 percent for investment), lender selection (not all lenders offer investor construction loans on the same terms), and how the loan converts at practical completion. An interest-only period post-completion is available through most lenders on investment loans and can improve holding cashflow in the early years.

Frequently asked questions