House and land packages in Australia have become increasingly popular in recent years, with more and more people opting to buy land and build their dream homes from scratch rather than buying already-built homes or apartment buildings with no outside space.
If you’re interested in purchasing land but don’t have the cash necessary to do so all at once, you may want to consider land and house packages instead. Often, these home and lot packages offer lower monthly payments than traditional mortgages, allowing you more flexibility in how much money you can afford each month. So, whether you’re looking for more affordable home financing or additional time to save up money for your down payment, here are three reasons why purchasing house and land packages may be the perfect solution for your financial needs!
1. Financial Benefits
Many people are still worried about investing in a property package, particularly since they tend to cost more than if you were to build on your own. However, several financial advantages come with purchasing one of these packages, such as,
- tax advantages (you can offset annual income by as much as $36,000 through deductions),
- low maintenance costs (the builder takes care of most routine repairs), and
- increased equity in your investment (house and land packages increase in value faster than building separately).
Most importantly, all home-building or remodeling projects have some risk involved. There’s no way around it. Purchasing a house from someone else reduces risk because you know exactly what you’re getting into.
2. Reduce your taxes
A common misconception of house and land packages is that they are tax-free. In fact, if you purchase a brand new house off-the-plan, it may be exempt from stamp duty but not a land tax. Also, depending on where you live, some contracts might ask you to pay annual fees for ongoing property management, meaning those costs should be considered when calculating your total outlay. While buying a package may reduce some upfront costs compared with purchasing individually, it’s important not to overlook all financial factors before signing on any dotted lines.
Make sure you consult an accountant to understand how taxes will impact your specific situation. When buying a home, consider what else comes with it. There’s no doubt that house and land packages can save time and money. But don’t forget that there’s more than just bricks and mortar included—some come complete with furniture, while others include parking spaces or even swimming pools.
As tempting as extras like these may seem up front, consider whether they will have value to you down the track (e.g., could a second car help make life easier?) You’ll want them for as long as possible, so factor their potential resale value into your decision.
3. Greater emotional health
Perhaps you’re a homeowner because of an emotional attachment, or maybe you just love your home. Either way, it stands to reason that owning a home will make you happier than renting. It has been shown that homeowners tend to be happier than renters even when holding income constant (in other words, even if homeowners make less money than renters). So, just by purchasing a house and land package instead of renting alone, you could potentially achieve greater emotional health.
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