Buying land first and building later can be a smart way to get into a new estate or secure a block in an area you love. But land loans come with different rules from standard home loans.
How land loans differ
- Higher deposits: many lenders limit land loans to 80% LVR, some to 90% with LMI
- Size limits: blocks above a certain size may be treated as rural, needing different policy
- Building timeframes: some lenders want you to start building within a set period for better terms
- Rates: sometimes slightly higher than home loans
Land with a build contract
If you're buying land and building straight away (a house-and-land package or separate contracts), lenders usually treat it as a construction loan. This often allows higher LVRs, including the 5% Deposit Scheme for first home buyers.
Land with no build plans
If you're buying land to hold, lenders are more cautious. Expect:
- Lower maximum LVR
- Greater scrutiny on location and zoning
- No rental income to help serviceability
Block size matters
Many lenders cap residential land at somewhere between 10 and 50 hectares, depending on the lender. Larger blocks may need a rural or lifestyle property lender. Zoning (residential, rural residential, primary production) also affects which lenders will help.
NSW stamp duty on land
First home buyers in NSW can get:
- No duty on vacant land up to $350,000
- Concessional duty up to $450,000
You must build and move in within the required timeframe.
First Home Owner Grant
In NSW, the $10,000 grant applies when building a new home, with a combined land and build value of up to $750,000. It's usually paid at the first construction progress payment.
Holding costs
While you hold land you'll pay:
- Council rates
- Possibly land tax if it's not your principal residence (exemptions can apply while building a home)
- Loan interest
Frequently asked questions
Can I buy land with a 5% deposit?
If you're a first home buyer with a building contract, possibly through the 5% Deposit Scheme. For land only, usually not.
Is there a deadline to build?
Some lenders and stamp duty concessions have timeframes. Check before you buy.
Can I build later with a different lender?
Yes. You can refinance the land loan into a construction loan with another lender.
Buying land? Call Finfident on 0424 545 654. We'll find a lender suited to your block and your building plans.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.