Building a first home in Queensland: land, grant and progress payments

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Queensland's help for first buyers leans heavily toward new homes. The $30,000 First Home Owner Grant is paid only on a new home. Transfer duty is waived on a first buyer's new home and on the land for one. So a great many first buyers end up doing something they never planned to do: buying a block and signing a contract with a builder.

Building is not just buying with a delay. There are usually two contracts where an established purchase has one. The loan is released in instalments over months instead of in a single payment at settlement. The grant is measured against a total that keeps moving until the last variation is signed. And there are deadlines, set by different agencies, that start on different days.

This guide follows a first home build in Queensland from the land contract to the day the keys are handed over. It draws on the Queensland Revenue Office for the grant and the duty concession, the Queensland Building and Construction Commission for the rules on building contracts and payments, and published lender material for how a construction loan works.

Queensland Revenue Office, First Home Owner Grant and first home vacant land concession pages; Queensland Building and Construction Commission, deposits and progress payments.

Two contracts or one

The first decision shapes everything after it, and many buyers make it without noticing.

A house and land package is often sold as two separate contracts: one with a developer for the block, and one with a builder for the house. The buyer settles on the land first and becomes its owner, then the builder starts work on the buyer's land.

A completed new home, sometimes called a turnkey purchase, is one contract. The buyer pays a deposit, the developer or builder finishes the house on land it owns, and the buyer settles on the finished product.

The two look alike in a brochure and are treated differently almost everywhere else. Under two contracts the buyer needs a construction loan, pays the builder in stages, and claims duty relief under the first home vacant land concession. Under one contract the buyer has an ordinary loan that settles once, and claims the first home (new home) concession. The grant is available either way, but the route to it differs: one is a contract to build, the other is the purchase of a new home.

The rest of this guide deals mainly with the two-contract build, because that is where the unfamiliar rules are.

The grant on a build: what counts in the $750,000

The First Home Owner Grant is $30,000 for contracts signed on or after 20 November 2023, and the State Budget of 23 June 2026 continued it for contracts signed from 1 July 2026, according to the Queensland Revenue Office. On a build the date that counts is the day the building contract is signed.

To qualify as a contract to build, the agreement has to be what the Revenue Office calls a comprehensive building contract. Its eligibility page describes one as a contract under which the builder undertakes the work "from the start of the building work (laying of foundations) to the point where the home is ready for occupation". One builder, the whole job. A buyer who splits the work among several contractors is treated as an owner builder, which a later section covers.

The limit is where builders' clients go wrong. The home must be valued at less than $750,000, and for a contract to build the Revenue Office adds two amounts together: the cost in the building contract, and "the unencumbered value of the land as at the contract date". The land is in the sum even though it was bought under a different contract from a different seller.

The total is also not frozen on signing day. The Revenue Office counts variations to the building contract. Where the grant has been paid before the home is finished, its obligations page says the applicant must tell the office within 28 days if the value reaches $750,000 or more with variations included. A stone benchtop, a wider driveway and an upgraded air-conditioning system are each small; together, late in a build, they can carry a home across the line.

Duty on the land: nil, with a two-year clock

When the block is bought under its own contract, the duty question is about vacant land. Since 1 May 2025 the first home vacant land concession has removed all transfer duty on residential land bought to build a first home, with no limit on the land's value. The Revenue Office's examples show nil duty on land at $350,000 and at $500,000. Duty is still charged on any part of the land that is not residential.

At the general rates the duty on a $330,000 block would be $9,975, which is $1,050 plus $3.50 for each $100 over $75,000. That is the saving on a block at that price.

The concession comes with conditions that are tighter than those for a finished home. The buyer must pay market value for the land. The buyer must never have held an interest in a residence anywhere in the world, and must never have claimed this concession before. Only one home can be built on the land. For transactions entered into from 1 August 2026, the State Budget notice adds that the buyer must be an Australian citizen, a permanent resident or a specified foreign retiree.

Then there is the clock. The Revenue Office requires the buyer to build the home, move in with their belongings and live there on a daily basis within two years of the land settling, and states that this time cannot be extended.

Two years sounds generous and often is not. It runs from settlement of the land, not from the day the slab is poured. Finance, design, building approval and the builder's queue all come out of it before construction starts. A buyer who settles on land and then spends a year deciding on a design has used half the allowance. If the deadline is missed the buyer must notify the Revenue Office, the duty is reassessed, and the office's page says unpaid tax interest and penalty tax can be added.

A completed new home bought under one contract is under the first home (new home) concession instead. Duty is nil there too, and the buyer has one year from settlement to move in. There is no building deadline, because the building is finished before the buyer owns anything.

The building contract: deposits and written terms

Home building in Queensland is regulated by the Queensland Building and Construction Commission, which licenses builders and sets rules for contracts with home owners. Three of them matter from the first meeting.

The first is that the contract is written. The commission's guidance says a written, dated and signed contract is essential, and that contracts for work valued over $3,300 must include advice about the owner's right to a cooling-off period.

The second is the deposit. For work priced at $20,000 or more, which covers every new house, a builder may ask for a deposit of no more than 5 per cent of the contract price. Smaller jobs have higher limits: 10 per cent for work from $3,301 to $19,999 and 20 per cent for work of $3,300 or less. There is one exception relevant to new homes. Where more than half the contract price is for work done away from the site, as with a largely prefabricated home, the limit is 20 per cent.

The third is that changes go in writing. The commission defines variations as changes made to the contract after it is signed, including changes to materials or to the work itself. For a first buyer a variation has three effects at once: it changes the price owed to the builder, it may need the lender's agreement, and it is added to the value tested against the grant limit.

Residential building work is also covered by the Queensland Home Warranty Scheme, which the commission administers. Its published entitlements give standard cover of $200,000 if the work is not completed, and $200,000 for defects after completion, with optional additional cover that raises each figure to $300,000. Accommodation and storage costs of up to $5,000 sit inside the standard amounts.

Progress payments: paying for work done

After the deposit, the builder is paid in instalments called progress payments. The commission's rule is short: all progress payments must be relative to the amount of work completed. It adds a specific brake. A builder cannot claim more than 50 per cent of the total contract price, deposit included, until at least half the on-site work has been done.

The reason for the rule is the owner's protection. If a builder fails part-way through, the owner's position depends on how much has been paid against how much has been built. The commission's advice to owners is blunt: "don't pay in advance", and do not pay more than the maximum deposit the law allows. It warns that an owner who pays beyond the limits, or ahead of the work, reduces what can be recovered under the Home Warranty Scheme, and that an excess deposit cannot be claimed back through it.

In practice a first buyer rarely pays these instalments from savings. The lender pays them, at the buyer's instruction, from the construction loan. That makes the lender a second pair of eyes on each claim, but the responsibility for authorising a payment stays with the owner.

How the construction loan follows the stages

A construction loan is approved for the full cost and then released in pieces. Westpac's published description of its construction loan is typical of how lenders set it out: the borrower draws the loan down in steps, which it lists as slab, frame, lockup, fit out and completion.

Two features make the loan cheaper during the build than its size suggests. Interest is charged only on the amount drawn so far, not on the whole approved sum. And the lender's material says interest-only repayments are available during construction, which helps a buyer who is still paying rent.

The lender wants documents before it starts: Westpac lists council-approved plans, the signed building contract with its payment schedule, and any variations, and asks for copies of the builder's insurance before the first payment. It may inspect before paying a claim, and says an inspection can add four to five business days. The final payment is released only after its valuer confirms the home was completed in line with the original plans and specifications, and the borrower provides building insurance for the finished house.

That last condition connects to the grant. The Revenue Office treats a contract to build as complete when the home is ready for occupation and the necessary certificate, a final inspection certificate or certificate of occupancy, has been issued. The lender, the builder and the Revenue Office are all waiting on the same piece of paper.

Which low-deposit schemes accept a build

Not every scheme a first buyer might use for the deposit will fund a block and a building contract.

The 5% Deposit Scheme is the one most builders' clients use. The scheme fact sheet published by participating lenders lists house and land packages and vacant land with a building contract among eligible purchases, and allows the usual 30-year loan term to run up to three years longer for a new build. Land without a building contract is not enough.

Queensland's Boost to Buy is the exception in the other direction. Queensland Treasury requires a completed dwelling with a certificate of occupancy or final inspection certificate, so a buyer set on that scheme is limited to a finished new home or an existing one.

The super saver scheme has a sequence to respect. The Australian Taxation Office says released savings can go toward a contract to construct a home on vacant land, provided ownership of the land had not passed to the buyer before the determination was requested, and the construction contract is entered into within 12 months of requesting the release.

A worked example

The figures below are illustrative. They assume a first buyer who purchases a $330,000 block and signs a $390,000 comprehensive building contract, with a payment schedule agreed between the buyer and the builder. The schedule is an example, not a legal standard: the law sets the deposit limit and requires payments to match the work, and the contract sets the stages.

Three results follow from these numbers.

The value tested for the grant is $720,000: the $330,000 land plus the $390,000 contract. That is $30,000 under the limit, so the buyer has room for variations of up to $29,999 before the home reaches $750,000 and the grant is lost.

The duty on the land is nil under the first home vacant land concession, against $9,975 at the general rates, on the condition that the buyer is living in the finished home within two years of the land settling.

And the debt builds gradually. After the frame stage the builder has been paid $156,000, which is 40 per cent of the contract, and the buyer is paying interest on what has been drawn for the land and for those stages, not on the full cost of the project.

When the grant arrives

A first buyer who is counting on the $30,000 needs to know when it turns up, and the honest answer is that it depends on how the claim is made.

The Revenue Office offers two routes. An application through an approved agent, which is a bank or lender authorised to receive grant applications, is lodged with the loan and is described by the office as the faster option. An application made directly to the Revenue Office is different: on that route the grant is not paid until the home is complete and every supporting document has been supplied.

The office's general statement is that the grant is paid "at different times depending on how and when you apply, and whether you are building or buying", and it cautions applicants not to rely on the grant for a payment that has to be made by a fixed date. For a builder's client the practical step is to ask the lender, at the time of the loan application, at which point in the build it expects the grant to be available and whether it can be counted toward the funds needed to complete.

There is a deadline at the far end too. An application must be made within one year of the home being completed.

Owner builders and family land

Two variations on the standard build have their own rules for the grant.

An owner builder, for the Revenue Office's purposes, is anyone who builds without a comprehensive building contract, whether they do the work themselves or coordinate several contractors with no single builder responsible for the whole. The date that fixes the grant is the day the laying of foundations starts, not a contract date. The value tested against $750,000 is the cost to construct the home plus the value of the land at the time the foundations are laid. The home must be a class 1a dwelling, which is the building classification for a detached house, with a final inspection certificate.

Building on a relative's land is also possible. The Revenue Office accepts a detached dwelling built for the applicant on land owned by a relative, defined as a parent, grandparent, child, stepchild or sibling of the applicant, or the spouse of any of them. The building contract must be in the applicant's name. The office asks for the contract, a statutory declaration from the relative authorising the construction, the final inspection certificate and a valuation of the portion of land the home sits on, and the total must still be under $750,000.

That second arrangement suits a family with a large block and an adult child without a deposit. It also means building a home on land the applicant does not own, and what that means for a mortgage, and for the family if circumstances change, is a matter for legal advice before the slab is poured.

The deadlines in one place

A build involves at least four clocks, and they are easy to confuse because each starts on a different event.

• Two years from settlement of the land to build, move in and live in the home, for the first home vacant land concession. It cannot be extended.
• Twenty-eight days to tell the Revenue Office if the home's value reaches $750,000 after the grant has been paid.
• One year from completion to apply for the grant, if it has not been claimed through the lender.
• One year from completion to move in, followed by six months of continuous living in the home, to keep the grant.

A buyer who claims the land concession has the least forgiving of these: it cannot be extended, and it is the only one that starts before a builder is on site. The two one-year periods begin when the home is finished.

Building a first home in Queensland attracts more support than buying an old one: a grant, no duty on the land and access to the main low-deposit schemes. In exchange it asks the buyer to manage a contract with a builder, a loan that pays out in stages and a set of dates. The Queensland Building and Construction Commission publishes guidance for owners on contracts and payments, the Revenue Office has an eligibility tester for the grant and the concessions, and a solicitor or conveyancer can review the land contract and the building contract together before either is signed.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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