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Buying a land in Melbourne can be bit confusing for the first time. But we have put together few useful information that might help you with land buying process.
Buying a land from the private owner is similar to buying a house from private seller but buying it from the Estate/Property Developer is slightly different.
Land Title
First thing first, you can build a home on the land you are buying only if your land is titled.
Titled Land means it is registered with the council and all the necessary resources(like water, electricity, gas, sewage connection) have been organised up to the street so you can start the process of building the house.
However your builder or you do have to apply to have them connected to your house though.
If you are buying a land in new suburb or from new land releases, most likely the land will belong to the Estate. Then you have to buy it from them.
Estate will require certain percentage for the deposit and then wait for the land to be titled. Once the land is titled then you have to organise the remaining payment.
Plan of Sub-division
If you are buying a land from completely brand new land releases, it might be difficult sometimes to identify /locate the actual land physically.
So it is better to ask your Real Estate agent for the Plan of Sub-division which will have the snapshot of the land with the Lot number, co-ordinates and other necessary information.
It is certainly recommended not to sign any documents or to provide the deposit until you are 100% satisfied and confirmed the land you are buying to save the run around later.
Title Time Frame
The time frame for getting the land titled may vary by the suburb or state. Check with your governing body for the up-to-date rule on this.
It may take some time for the land to get titled after providing the deposit. However there have been few proposals that the Estate can only accept the deposit within six months of getting the land titled.
Deposit & Contract
While some contract may have option of few days cooling off period but once you sign the contract the day starts from the day you sign the contract regardless of what the real estate agent says.
So sign the contract after you are completely sure of everything and have the pre-approval confirmation from the bank/financial institution.
Even if you are pre-approved for the land loan from the bank/financial institution, the actual loan might be lower depending the valuation from the bank.
So it’s better to discuss this with bank before you sign anything.
Conveyancing
You will need to contact the Conveyancing to completed the purchase of the land to ensure that the proper process has been followed.
Boundary Pegs & Final Inspection
It is better to confirm that all four boundary pegs are clearly visible before the land settlement to avoid the re-establishment survey cost added to while building the house later. Re-establishment survey could cost $1000 or more.
It is often a good idea to organise the inspection before the settlement day to ensure that the land is free of any debris and rubbishes.
First Home Owner Grant & Stamp Duty
Stamp duty on the land is usually payable on the settlement day.
But if you’re buying the land for the first time, you could be entitled to a First Home Owner Grant (FHOG), dependent on the state or territory or area in which you live. This could substantially offset the cost of your home.
Similarly, depending on your state or territory, you might be eligible for stamp duty concessions on the purchase of your building land.
You can check your State Government website for your eligibility.
Council Rate
Once the land is transferred to your name then, depending on the rate cycle, you will then receive the council rate payment notice.
Ready to build a house: Check out these handy New House Building Tips!
Disclaimer:
The information contained in this section are for general information and guidance only and based on the residential area in Melbourne. The actual steps may vary depending on the area you live.