Turn Key House and Land

What is a ‘Turn-Key’ House and Land Package?

Turn Key means exactly that; the property should be completed so that it is ready for immediate occupation.

This purchase attracts split contracts; one for the land and one with a Builder.

The land will settle first, and if you are borrowing money to purchase, you will begin paying interest on the advanced loan from land settlement and during construction (there are some taxation benefits so please check with you Accountant).

Once the construction commences (after your land settlement) the Builder will claim 'draw downs', from your financial institution (as per your building contract), at varying stages.

This means that your loan increases incrementally until your home is completed.

Summary Guide

How Turn Key House and Land Package works:

  • Split contracts (one for the land and one for the build)

  • Land settlement first

  • Finance interest payments commence on the land loan portion, from settlement (assuming loan for land)

  • Individual, standalone house

  • Potential development profit

  • Lower stamp duty (on land component only)

  • Low maintenance, as a new property and items under warranty

  • Statute, structural warranty from Builder

  • High depreciation from all new items

Risks

  • Cash outlay during construction without rental return until complete

  • Make sure the ‘Turn-Key’ is exactly that, completely finished, ready to just turn the key and move in

Tips

  • If you are purchasing interstate and cannot make it over for the ‘handover’ inspection then ask your selected property manager to attend or make sure an independent inspection is included in your package

  • It is highly recommended to seek professional legal, financial and taxation advice