Perthland Perthland

Tips for Buying Land in Perth: A Broker's Perspective on Finance

Buying land in Perth has plenty of appeal, whether you’re planning a custom home or looking for a smart long-term investment. But financing vacant land isn’t quite the same as buying an established property.

From loan types to lender requirements, there are a few extra steps involved. That’s where a mortgage broker can really make a difference by simplifying the process, explaining your options and helping you plan ahead.

Here’s what you need to know about buying land in Perth from a broker’s perspective.

Understanding land loans in Perth

What is a land loan?

A land loan is a specific type of financing used solely to purchase vacant land. It differs from a construction loan, which funds the building process, and a standard home loan, which finances an existing completed property.

A key difference is that a land loan covers just the cost of the land itself, and not any work done on it. A construction loan, however, will include the full amount you will need to buy the land and build your home.

Another key difference is that construction loans are designed with a set timeframe to build, where funds are drawn down progressively as the build advances. Land loans, however, only cover the purchase of the land.

Land loans may be considered higher risk by lenders. Land prices tend to fluctuate more frequently than established homes, and vacant land can take longer to sell, meaning lenders may have a harder time recovering their money if they need to repossess. 

Additionally, because you are not obligated to build immediately on vacant land, there is greater uncertainty around the property's future value as your lender won’t know the size, type and quality of the home you eventually build when they finance your land purchase.

As a result of this increased risk, lenders often require a larger deposit on land loans (commonly 20% or more) compared to home loans, which may allow deposits as low as 5–10%. This means the maximum loan-to-value ratio (LVR) on land loans is usually lower, sometimes capped at 80% or less, depending on the lender and the land itself.

Understanding these differences helps you and your mortgage broker select the right finance product and structure your loan to suit both your land purchase and any future building plans.

Types of land and their impact on finance

Not all land is the same, and the type you buy can affect both your eligibility and your costs.

  • Serviced vs. unserviced land: Serviced land (with utilities like power, water, sewerage and road access already in place) is generally easier to finance. Lenders view it as lower risk because it's ready (or nearly ready) for construction. Unserviced land, by contrast, may require costly infrastructure before building can begin, making it riskier in the eyes of lenders. As a result, you may face stricter lending criteria, higher deposits or limited lender options.
  • Zoning and planning: Residential zoning is typically required for standard home loans, as lenders want assurance that the land will be used for housing. If the land is zoned commercial or agricultural, it may not qualify for a residential loan, which means you’d need a specialised loan with different criteria. These can involve higher deposit requirements, shorter loan terms or higher interest rates.
  • Bushfire Attack Level (BAL) rating: BAL is a method for rating the intensity of a location's potential exposure to bushfire. Higher BAL ratings can increase building costs and impact insurance, which lenders consider.
  • Slope and site costs: Sloped or uneven sites may require costly works to prepare for construction, influencing your total budget and borrowing needs.

Key considerations when buying land in Perth (from a broker’s lens)

Your deposit

Land loans often require a larger deposit because lenders see vacant land as higher risk. That’s because there’s no dwelling to secure the loan. Saving more upfront gives lenders greater confidence, which can expand your loan options and reduce or eliminate the need for lender’s mortgage insurance.

Your borrowing capacity

Lenders look at the land value, but they’ll also consider your future construction plans when calculating your borrowing capacity. Being clear with your broker about your intentions helps shape the right finance strategy and ensures the lender has a complete picture from the start.

Timeframes for building

Many lenders implement a deadline by which you should have started building. This is often within 12–24 months, but a broker can help you find a lender whose timeline matches your plans.

Due diligence

Doing your homework upfront can save you thousands of dollars and prevent major setbacks down the line. Before buying, it’s important to check the land’s legal title, get a soil test and confirm access to services like water, electricity and sewerage. These checks can reveal potential red flags that affect what you can build, how much it will cost or whether the site is suitable at all.

Associated costs

If you have found a suitable piece of Perth land for sale, factor in the following when calculating costs:

  • Stamp duty (in WA, you may qualify for stamp duty concessions if you are a first home buyer, depending on the value of the land)
  • Legal and conveyancing fees
  • Council rates
  • Utility connection costs
  • Site preparation and surveying

The mortgage broker advantage for buying land in Perth

Access to more lenders

Unlike going directly to a bank, a mortgage broker has access to a wide panel of lenders, including those that offer niche land finance options. Not all banks or lenders provide loans for vacant land, and some have stricter eligibility criteria than others. A broker who specialises in land purchases in Perth knows which lenders are open to your type of deal, whether you're buying in a new estate, a semi-rural area or on a subdivided block.

Navigating complexities

Land loans come with unique conditions and terminology that can trip up even experienced buyers. A good mortgage broker will take the time to explain the process in simple, jargon-free language, making sure you understand what you’re signing up for. They’ll help you compare loan options, clarify terms like 'loan-to-value ratio' and 'zoning restrictions', and make sure there are no surprises down the track.

Understanding lender requirements

Each lender has different requirements when it comes to things like minimum deposit, land size, zoning and timeframes for starting construction. For example, some lenders may require you to begin building within 12 months, while others allow longer. A broker knows these variations and can match you with a lender whose policies align with your plans, helping you avoid unnecessary delays or rejections.

Strategic planning

If you’re not planning to build straight away, a mortgage broker can help you structure your loan with the future in mind. They’ll consider how your land loan will transition into a construction loan later and ensure both stages are set up to suit your long-term goals. This can be especially useful for first-time builders, investors or those waiting on approvals before they start building.

Time-saving

There’s a lot of paperwork involved in securing a land loan, and dealing with lenders directly can be time-consuming and stressful. A broker handles all of this for you, from gathering documentation and submitting applications to following up with lenders and negotiating terms. This saves you hours of admin and lets you focus on the exciting parts, like planning your dream home.

Step-by-step: Financing your Perth land purchase with a broker

  1. Initial consultation: Discuss your goals, budget and timeline with your broker. Outline your financial position and what you want to achieve so your broker can recommend suitable lenders and loan structures from the beginning.
  2. Get pre-approval: Determine your borrowing capacity by applying for pre-approval. This can help you narrow your search and show sellers or developers that you're a serious buyer with finance already in motion.
  3. Find suitable land: Assess the finance implications of different land. Consider factors like zoning, titles, land size and developer conditions, which can all impact your loan approval or building plans.
  4. Submit your application: Gather supporting documents and prepare your formal loan application with the help of your broker. Your broker will also help you respond to any lender questions quickly to keep the process moving.
  5. Settlement: Finalise your purchase by working with your broker, lender and conveyancer. Complete legal checks, transfer funds and take ownership of your land once everything is approved and settled.

FAQs about buying land in Perth

Is it harder to get a loan for land than a house?

It can be, as lenders might consider vacant land a higher risk. A larger deposit and strong financial position can help.

Do First Home Owner Grants apply to vacant land purchases in WA?

The WA First Home Owner Grant (FHOG) only applies if you’re building a new home, not for land alone. However, you may still be eligible once construction starts. 

Additionally, you may be eligible for the First Home Owner Rate (FHOR) – a concessional rate of duty applied to certain transactions, including the purchase of vacant land. If you acquire vacant land, you can apply for the FHOR after being approved for the FHOG. 

How long can I hold vacant land before building?

It depends on the lender. Some require building to begin within 12–24 months, while others may offer more flexibility. 

What extra costs are involved when buying land?

Stamp duty, legal fees, council rates, soil testing, site costs and utility connections are all common expenses. Annual land tax will also apply to land not used as your principal place of residence. 

Can I use my super to buy land in Perth?

Generally, you can’t use your super to buy land unless it’s through a self-managed super fund (SMSF) under strict conditions. Speak with a financial adviser first.

Conclusion: Your path to Perth land ownership, simplified

Buying land in Perth can be a rewarding step, but getting the finance right is key. A Loan Market broker brings experience, lender access and personal support to help you navigate it all with confidence.

Ready to find the perfect block in Perth? Don’t navigate land finance alone. Get in contact with a seriously helpful Loan Market broker today to explore your options and get expert advice tailored to your needs.

Sources:

https://research.csiro.au/bushfire/assessing-bushfire-hazards/bal-assessment/ 

https://www.wa.gov.au/government/announcements/changes-the-first-home-owner-rate-of-duty-and-the-the-plan-duty-concession 

https://www.wa.gov.au/government/publications/duties-fact-sheet-first-home-owner-rate 

https://www.wa.gov.au/government/publications/about-the-first-home-owner-grant 

https://www.wa.gov.au/organisation/department-of-treasury-and-finance/about-land-tax 


Published: 18/7/2025
Share
)