One contract or two
Stamp duty is a tax on buying land, including anything built on it. A building contract, on its own, is a contract for work, not a purchase of land. So when you buy vacant land under one contract and sign a separate contract with a builder to build your home, duty is generally charged on the land contract only. When you buy a finished or partly finished home and land together, or the seller builds the home before settlement, duty is charged on the combined value.
The ACT Revenue Office states the rule plainly: if you buy land and arrange to build under a separate contract, you pay duty on the land contract only; if the seller is building the home before you settle, as with most house and land packages and off the plan purchases, you pay duty on the combined house and land value. The other states apply the same principle through their own legislation.
What it can save
| State | One contract, duty on $850,000 | Split, duty on the $450,000 land | Difference |
|---|---|---|---|
| New South Wales | $32,437 | $14,437 | $18,000 |
| Victoria | $46,070 | $18,970 | $27,100 |
| Queensland | $24,100 | $14,175 | $9,925 |
| Western Australia | $34,891 | $15,390 | $19,501 |
| South Australia | $40,580 | $18,830 | $21,750 |
| Tasmania | $33,435 | $16,123 | $17,313 |
| Australian Capital Territory | $25,108 | $6,708 | $18,400 |
| Northern Territory | $0 | $20,057 | $-20,057 |
When two contracts are treated as one
Revenue offices look at substance, not just paperwork. If the land contract and the building contract are really one deal, they can be added together and taxed as one. Victoria's State Revenue Office calls this substantially one arrangement, and its public ruling lists what it looks at: whether the contracts were negotiated separately, whether one depends on the other, whether the land was genuinely available to buy without the build, and the timing and sequence of the contracts.
- Usually treated as separate: you buy a block from a land developer and choose your own builder; the land contract doesn't require you to build with a particular builder, and could settle on its own.
- At risk of being added together: the land is only sold with a specific build, the land contract is conditional on the building contract (or the reverse), or the land seller and builder are the same or associated, and the home is built before the land settles.
Whether a package is dutiable on the land only depends on the exact contracts. Ask your conveyancer or solicitor to confirm how duty will be assessed before you sign either one, and don't sign a building contract that is conditional on the land unless you understand the duty consequences.
How split contracts affect your loan
A split contract usually means a construction loan: the lender pays for the land at settlement, then pays the builder in stages as the home goes up. You generally pay interest only on what has been drawn, so repayments start small and grow as the build progresses. You also need to fund your deposit and any costs above the loan at the start, because lenders usually require your own money to go in before theirs. See how construction loans work.
A single house and land contract (or a completed new home) is usually financed with a standard home loan that settles once, when the home is finished. Simpler, but the whole price is generally dutiable outside the states that exempt new homes for first home buyers.
Common questions
Do you pay stamp duty on a building contract?
Not on its own. Duty is charged on buying land. A separate contract to build on land you already own or are buying is generally not dutiable, unless the revenue office treats the land and build as substantially one arrangement.
Is a house and land package always taxed on the full price?
When it is one contract, or the home is built before you settle, usually yes. When the land and build are genuinely separate contracts, usually only the land is dutiable. Some states also exempt new homes for first home buyers, and the Northern Territory exempts eligible house and land packages entirely until 30 June 2027.
Sources
- ACT Revenue Office: about conveyance duty (house and land, off the plan, separate building contracts), checked 21 October 2026
- SRO Victoria public ruling: aggregation of dutiable transactions ('substantially one arrangement'), checked 21 October 2026
- SRO Victoria: first home buyer duty (vacant land assessed on land value only), checked 21 October 2026
- Stamp Duty Act 1978 (NT), section 90D: house and land package exemption, checked 21 October 2026
General information only, not credit advice. It doesn’t take your objectives, financial situation or needs into account. Rules and figures change; check them, or talk to Joshua, before you rely on them.