Follow Us On: Prepare for Australia on Facebook Prepare for Australia on Twitter
Share this page:

Building a new house

Build-house

When planning to build a house in Australia, you must make sure you are eligible to do so as a foreign citizen. The Foreign Investment Review Board (FIRB) has a list of exemptions for foreigners who want to build a residential dwelling in Australia.

Under the Foreign Acquisitions and Takeovers Act (1975), foreign citizens who buy residential land in Australia must begin construction of a dwelling on that land within 24 months of the purchase.

Of course, if you are a permanent resident, these conditions to not apply, and you are subject to the same building rules as Australian citizens.

Although building a home was once considered a cheaper option than buying an existing dwelling, recent increases in the price of construction materials mean that this is no longer always the case.


Advantages and disadvantages of building

Advantages

  • Design - you are able to build a house around your particular lifestyle, rather than having to adapt to a house that someone else built.

  • Location - depending on budget it's up to you where you live. You might want to live close to family, schools, work or close to the beach or bush.

  • Energy efficiency - newer homes are much more energy efficient than older homes. As well as having more thermal mass (thicker walls, ceiling insulation), newer homes often have energy saving features such as efficient lighting systems, solar panels, and double glazed windows. It is cheaper to install these items in a new house than retro-fit them in an older house.

  • Cost of repairs - as everything in the house is new, the cost of repairs is likely to be very low for the first few years.

  • Stamp duty - when building a house, you only pay government stamp duty on the land, not the house. This is much cheaper than paying stamp duty on a dwelling.

  • Reliable connections - aew housing estates have modern power, gas and telecommunications connections which means you will be less affected by outages.

  • Grants - if you live in NSW or Queensland, and you are building your first home, you are entitled to a $15,000 government grant (see below). All other states and territories offer $7,000.


Disadvantages of building

  • Unexpected costs - expenses can blow out unexpectedly. Often extra costs are not known until construction begins e.g. there may be stones buried underground that need to be removed. Post-construction costs such as landscaping can also be difficult to determine at the beginning of the project.
  • Material prices - increased costs of construction materials, such as steel, have made building a home more expensive.

  • Land prices - as vacant land becomes scarcer, especially in Australia's capital cities, it may be very expensive to build in your ideal location. The only way to build in some areas is to buy an older home and demolish it.

  • Delays - there can be delays due to weather or holidays.

  • Reliable workmen - it is hard to know how reliable your tradesmen are at the beginning of construction.

  • Incomplete construction - if you don't have the money to finish the entire home, it can be demoralising to live in an incomplete house.


Advice on building a house

The Federal Government website YourHome contains useful advice on the steps to take when building your own home.


First Home Owner Grant (FHOG)

Anyone who builds their first home in Australia is entitled to a First Home Owner Grant.