Last updated 5 October 2026. Written by the REIN Editorial Team. Researched with the help of AI tools, then fact-checked against the sources below.
Reviewed by Scott Fraser, founder of REIN, licensed real estate agent (NSW) with 10 years on the developer side of house and land.
Quick Answer
A house and land package usually needs two deposits, because you sign two contracts. The land contract deposit is commonly up to 10% of the land price. The build contract deposit is capped by state law: 5% in Victoria and Queensland for contracts of $20,000 or more, and 10% in NSW. Separately, your lender will want a deposit across the whole loan. Below 20%, you’ll usually pay lenders mortgage insurance (LMI).
Already been shown a package? Get it checked before you pay a deposit.
Why a House and Land Package Has Two Deposits
Most house and land packages are sold as two separate contracts:
- A land contract with the developer or landowner, for the lot.
- A build contract with the builder, for the home.
Each contract has its own deposit, its own payment terms and its own rules. The build contract is then paid in stages as the home goes up. Our guide to construction loans for house and land explains how those progress payments work.
The Land Deposit
The land deposit is set in the land contract. It’s commonly up to 10% of the land price, although some developers accept less, or a small initial holding deposit followed by the balance on exchange. The land deposit is usually held in a trust account until settlement.
If the land isn’t titled yet, settlement may be months away. Check the sunset date and what happens to your deposit if the land doesn’t register in time.
The Build Deposit: State Limits
Builders can’t ask for any deposit they like. Each state sets a maximum for residential building work:
| State | Maximum build deposit | Source |
|---|---|---|
| NSW | 10% before work starts | NSW Government Consumer Building Guide |
| VIC | 5% for contracts of $20,000 or more (10% under $20,000) | Consumer Affairs Victoria |
| QLD | 5% for contracts over $20,000, with an exception of up to 20% where off-site or customised work is more than half the contract price | QBCC |
If a builder asks for more than the limit in your state, ask why in writing before you pay. Rules in other states differ, so check with the state regulator.
The Loan Deposit
Your lender looks at the whole purchase: land plus build. It will lend up to a percentage of the property’s value, and you fund the rest, plus costs such as stamp duty and legal fees.
When you borrow more than 80% of the property’s value, lenders usually charge lenders mortgage insurance. LMI protects the lender, not you, and it can add a significant cost to the purchase. Many investors aim for a 20% deposit to avoid it, while others choose to pay LMI to buy sooner.
The deposits you pay on the land and build contracts generally count towards your contribution, but confirm how your lender treats them before you sign.
How the Valuation Affects Your Deposit
Lenders base the loan on their own valuation, not the contract price. If the valuation comes in below the price you’ve agreed, the lender lends less and you need to cover the gap from your own money.
This is where package pricing matters. If the price includes a commission the market won’t pay, the valuation can come in low and your real deposit goes up. Builder commissions can run into tens of thousands of dollars, and they’re usually built into the price.
What to Check Before You Pay Any Deposit
- Who holds the deposit? Land deposits are usually held in trust. Ask where yours is held.
- Is the build deposit within the state limit?
- Is home warranty insurance (or your state’s equivalent) in place before the builder takes a deposit, where it’s required?
- Is the land contract subject to finance? Ask how long the finance clause runs and what happens to your deposit if the loan isn’t approved.
- What happens if the land doesn’t title on time? Check the sunset clause.
- Has the price been checked? Compare the land and build prices against recent sales before a deposit locks you in.
For the full list of buying costs, including stamp duty and conveyancing, see house and land package costs.
How REIN Helps
REIN is a buyer-only house and land advocate. We review a package you’ve been shown, show you the builder commission built into the price, and rebate 100% (excluding GST) of that commission to you. A REIN service fee applies, and the rebate typically covers the fee and more.
Common Questions
How much deposit do I need for a house and land package?
Usually a land deposit of up to 10% of the land price, a build deposit capped by state law (5% in Victoria and Queensland for contracts of $20,000 or more, 10% in NSW), and enough savings to meet your lender’s loan deposit and costs. A 20% loan deposit usually avoids lenders mortgage insurance.
Can I buy a house and land package with a 5% deposit?
Some lenders accept smaller deposits, but you’ll usually pay lenders mortgage insurance when you borrow more than 80% of the value, and you’ll still need to cover stamp duty and other costs. Check with your lender.
Is the build deposit refundable?
It depends on the contract. Read the termination and cooling-off clauses, and confirm the conditions in writing before you pay.
Do I pay stamp duty on the deposit?
Stamp duty is assessed on the purchase, not the deposit, and on a house and land package it’s often assessed on the land contract. Rules differ by state. See our guide to whether house and land packages are a good investment for more on duty.
Can I get a package checked before I pay a deposit?
Yes. REIN reviews house and land packages before you sign and shows you the builder commission inside the price. Book a free review.
Been Shown a House and Land Package? Get It Checked First.
Builder commissions can run into tens of thousands of dollars, and they’re usually built into the price. We’ll show you what’s inside yours before you pay a deposit.
GET MY PACKAGE CHECKED or call 1300 446 445.
Sources
- NSW Government – Consumer Building Guide (accessed 5 October 2026)
- Consumer Affairs Victoria – Deposits and payments for building work (accessed 5 October 2026)
- QBCC – Deposits and progress payments (accessed 5 October 2026)
- Moneysmart – Lenders mortgage insurance (accessed 5 October 2026)
Disclaimer: This guide is general information only and does not take your personal circumstances into account. It is not financial, credit, legal or tax advice. Deposit rules and lending policies change and differ between states and lenders, so confirm with your lender, conveyancer or adviser before you act.