Buy land and build, or buy an existing home, in Sydney? 2026 costs and rules

The NSW rules that change the numbers when you build instead of buying an established home: transfer duty, first home buyer help, foreign buyer charges, land tax, progress payments and the time you spend renting. Every rule links to the official source.

By XLGUpdated: 2026-10-28Every rule and figure is dated and sourcedPublished by AUD Build

Short answer

Building on land you buy can cost much less in transfer duty, because when you buy vacant land and sign a separate building contract, duty is charged on the land, not on the finished home. On the 2026/27 rates, duty on A$800,000 of land is A$30,187, against A$80,287 on an A$1.8 million existing house [1] [2]. First home buyers get the A$10,000 First Home Owner Grant only for a new home, capped at A$750,000 for land plus the building contract [5], and foreign persons are currently banned from buying established homes in Australia until 30 June 2029 [8]. Building takes longer and carries holding costs: about 9–16 months with a CDC [19], with loan repayments starting at the first progress payment and rent at a Greater Sydney median of A$800 a week for houses [12] [14].

This page explains NSW rules and published figures; it is not financial or tax advice. Check your own position with Revenue NSW or a licensed adviser.

Side by side

Item	Buy land and build	Buy an existing home
Transfer duty base	The land price, when the land settles before building under a separate building contract [2]	The full price of the home [1]
First home buyer duty help (FHBAS)	Vacant land: exempt up to A$350,000, concession up to A$450,000 [3]	Exempt up to A$800,000, concession up to A$1,000,000 [3]
First Home Owner Grant	A$10,000 if land plus building contract is A$750,000 or less [5]	Not available for established homes; A$600,000 cap for a newly built home [5]
Foreign persons	9% surcharge purchaser duty and 5% surcharge land tax apply to residential land; FIRB approval for vacant land generally requires the build to be finished within 4 years [6] [7] [9]	Banned from buying established dwellings from 1 April 2025 to 30 June 2029, with limited exceptions [8]
Land tax while you build	Principal place of residence concession for up to 4 years after you take ownership, if you then live there for at least 6 months and other conditions are met [10]	Exempt as your principal place of residence once you live there [10]
Paying	Deposit up to 10%, then progress payments for work done; loan repayments start at the first draw-down [11] [12]	Deposit and settlement, then repayments
Time to move in	About 9–16 months with a CDC, 12–18+ months with a DA [19]	At settlement
Standards and warranties	Meets 7-star NatHERS BASIX standards (since 1 October 2023); statutory warranties of 6 years for major defects and 2 years for other defects from completion; HBC cover [17] [11] [18]	Built to the standards of its time; warranties apply only if building work was completed within the last 2 or 6 years [11]

Transfer duty: worked examples on the 2026/27 rates

Duty is charged on the higher of the price and the market value [1]. These examples are AUD Build’s arithmetic from the official rate table, for a buyer who is not a foreign person and gets no first-home concession:

Purchase	Arithmetic	Transfer duty
Vacant land, A$800,000	A$11,602 + 4.5% of A$413,000	A$30,187
Existing house, A$1,550,000 (Greater Sydney median)	A$52,237 + 5.5% of A$260,000	A$66,537
Existing house, A$1,800,000	A$52,237 + 5.5% of A$510,000	A$80,287

The saving depends on the structure. Revenue Ruling DUT 018 applies duty to the land only where you buy the land and the building contract is separate. If the seller must deliver a completed house before transfer, as in many house-and-land packages, duty is charged on the land and the house [2]. Ask your conveyancer how a package is structured before you sign.

First home buyers

The First Home Buyers Assistance Scheme exempts new or existing homes up to A$800,000 and gives a concession up to A$1,000,000; for vacant land to build a home on, the exemption is up to A$350,000 and the concession up to A$450,000 [3].
A home built to replace demolished premises counts as a new home [4].
The A$10,000 First Home Owner Grant is only for new homes: up to A$600,000 when you buy a newly built home, or A$750,000 for land plus a comprehensive building contract. It can be paid on top of the duty exemption or concession, and you must live in the home within 12 months for at least 12 continuous months [5].
At least one buyer must be an Australian citizen or permanent resident [3] [5].

For context, the median Greater Sydney house sold for A$1,550,000 in January–March 2026 (NSW Government sales data) [15], and Cotality put the Sydney median house value at A$1,466,060 at 30 September 2026 [16], both above the first-home thresholds for established homes.

Buyers who are foreign persons

Surcharge purchaser duty is 9% of the dutiable value, on top of transfer duty, and applies to residential land including vacant residential land [6].
Surcharge land tax is 5% a year of the land value of residential land, with no tax-free threshold, including land where homes are being built [7].
Under the federal rule, foreign persons are banned from buying established dwellings from 1 April 2025 to 30 June 2029, with limited exceptions; new dwellings, off-the-plan property and vacant residential land remain open to application [8].
FIRB generally does not treat land that previously had a house on it as vacant residential land, so a typical knockdown rebuild site counts as an established dwelling. Approval to buy vacant land generally requires the construction to be completed within four years [9].

Land tax while you build

Your home is generally exempt from land tax. If you buy land to build your home on, you can claim a principal place of residence concession for up to 4 years after you take ownership, provided, among other conditions, that you then live in the home continuously for at least six months, the property earns no income once construction begins, and local planning rules do not allow more than 2 residences on the land [10]. That last condition matters if your lot could take a duplex or more dwellings.

Paying for a build

The maximum deposit is 10%, and the builder cannot ask for any payment until home building compensation (HBC) cover is in place and you have the certificate [11].
Contracts over A$20,000 must have a progress payment schedule, and payments must be for work actually done, not time on the job [11].
With a construction loan, repayments start once the first progress payment is drawn down, so you may pay rent and loan repayments at the same time [12].
The NSW Planning Portal suggests a 12-month lease or longer to allow for building delays and weather [13]; at the Greater Sydney median house rent of A$800 a week, a year is about A$41,600 [14].

If you already own an older house

A knockdown rebuild avoids buying land at all: you rebuild on the land you own. The new home counts as a new home for first-home rules [4]. Estimate it with the knockdown rebuild cost calculator, and see the 12 knockdown rebuild checks before you start.

Where AUD Build fits

AUD Build brings design, construction, materials, new-home sales and lending together in one company, backed by AUD Build Group, so one team can price the land-and-build option and, through Real Estate AU (NSW agency licence 10147202), the sale of newly built homes.
Design decides how a home is built and what it costs; materials come from AUD Build’s own supply chain platform, www.audbuild.net, and AUD Build clients can log in to check the material unit prices in their quote.
Construction finance can be arranged through the group’s AUD Lend (Australian Credit Licence 565029), which provides credit and credit broking; AUD Build itself does not provide credit, and you can use any lender.
NSW Builder Licence 475778C; the building contract is signed with AUD Build’s operating company.

Questions

Is it cheaper to buy land and build in Sydney?

Often in transfer duty: when you buy vacant land and sign a separate building contract, duty is charged on the land only. On the 2026/27 rates that is A$30,187 on A$800,000 of land, against A$80,287 on an A$1.8 million existing house. Building takes longer, though, and you may pay rent and loan repayments at the same time.

Do I pay stamp duty on a house-and-land package?

It depends on the structure. If the land settles first and the building contract is separate, duty is on the land. If the seller must deliver a finished house before transfer, duty is on the land and the house (Revenue Ruling DUT 018).

Can a foreign buyer buy an existing house in Sydney?

Generally not until 30 June 2029: foreign persons are banned from buying established dwellings from 1 April 2025, with limited exceptions. Vacant residential land, new dwellings and off-the-plan property remain open to application, with 9% surcharge purchaser duty and 5% surcharge land tax in NSW.

Can first home buyers get the grant when building?

Yes. The A$10,000 First Home Owner Grant is for new homes, including building on land, where land plus the building contract is A$750,000 or less, and it can be paid on top of the duty exemption or concession.