How does land registration affect my new home?
If you’re in the process of purchasing a block of land then you’re probably hearing a lot about land registration. New land in Sydney (or a lot of it) is coming from land that had not previously been subdivided. This means that ‘lots’ you are looking to buy preciously didn’t exist. Land registration occurs when the land is officially developed. At this point the lots of land are ready to be built on or can be sold on to other owners. This is why you often only have to pay a deposit on the land until such time that it registers because up until that point, you can’t do anything with it. And on that note: how does the land registration affect you and your new home.
The Land Registration Date
You’ve just purchased a block of land – congratulations! This new block of land will be in one of the following situations:
- Registered – this means that the land is ready to be built on.
- Unregistered – you will be able to build on the block but it is not ready just yet.
In this blog, we’re looking at how unregistered land can affect your home building journey.
If you’ve purchased or are looking to purchase unregistered land you need to consider several factors that may affect the building process. These include delay and cost.
It is essential to know when the developer expects your block to register. This will affect when you can more into your new home.
If you’re needing to move into your new home sooner rather than later then unregistered land might be a problem for you. Allow a minimum of 12 months after the proposed registration date for the home to be built. (This is assuming that you’ve have already chosen a builder and entered into a contract before the registration date arrives.) This means that if your block registers in June this year, you probably won’t be able to move in until after June next year.
If you need to be in your new home within the next 12 – 16 months then you might want to consider purchasing registered land.
Unregistered land also affects your budget. When you’ve got more than 6 months until the block of land registers price becomes an issue. Not the price of the land – the price of the house. Any quotes or house prices that you are getting now are probably not going to be valid by the time your block registers. Builders will still be able to organise tenders for you but it is likely that you will be subject to a price rise before building commences. This is due to the cost of supplies and trades increasing. These costs increase slowly over time and the builder has no choice but to pass that cost on.
If your land is unregistered, don’t stop talking to builders. Simply ask them to allow for price rises or to include any price rises that they are currently aware of. This will help you keep on budget even once the land registers.
So, do I buy registered or unregistered land?
The short answer is: either.
It doesn’t really matter if the land is registered or not. Instead, take into consideration your personal circumstances. If you are on a time crunch, it might be worthwhile to look for registered land. On the flip side, unregistered land gives you more time for planning – especially if you are designing a custom home.