Buying Vacant Land and Building Contracts

Buying vacant land can be an excellent opportunity to create a bespoke home or develop a long-term investment. However, purchasing an undeveloped block and entering into a building contract involves legal, planning, and construction risks that differ significantly from buying an established property.

Understanding how vacant land contracts and building contracts operate and where legal protections are essential can help you avoid costly delays, disputes, or compliance issues later.

Undeveloped land appeals to buyers seeking flexibility, location choice, and control over design. Vacant land purchases offer diverse options, spanning urban residential lots, rural acreage, and remote regional parcels. Unlike established homes, however, undeveloped sites demand rigorous evaluation of buildability, local planning regulations, and planned infrastructure prior to commitment

Buyers must also budget for costs beyond the purchase price, including site preparation, approvals, service connections, and construction contingencies.

Before signing a contract, thorough due diligence is essential. Buyers should confirm that the land can legally and practically be used for their intended purpose.

Key matters include zoning and planning controls under the relevant local planning scheme, overlays such as flood, bushfire or environmental constraints, and any neighbourhood plans affecting future development. A title search should be reviewed to identify easements, covenants, or restrictions that may limit where or how you can build.

Site conditions are equally important. Soil classification, contour surveys, drainage, and access can significantly affect construction costs. Buyers should also confirm whether essential services such as water, sewerage, electricity, and telecommunications are connected or will require additional works.

Vacant land in Queensland is usually sold under a standard REIQ contract with tailored special conditions. The contract sets out the purchase price, deposit (commonly 5–10%), settlement date, and disclosure requirements.

Since 1 August 2025, sellers of vacant freehold land must provide a Form 2 Seller Disclosure Statement before the contract is signed. This is a mandatory requirement under the Property Law Act 2023 (Qld). If this disclosure is not provided, the buyer may have an absolute right to terminate the contract at any time up to settlement.

When purchasing an off-the-plan proposed lot in a new development, the transaction is governed by the Land Sales Act 1984 (Qld) (the Act), which requires the developer to provide a signed Disclosure Statement and a detailed Disclosure Plan before you sign the contract. Because these lots are often part of a master-planned estate, the contract will also include extensive Building Covenants and Design Guidelines that mandate a strict timeframe for construction, often requiring you to commence building within 12 months and finish within 24 months of settlement. This makes it critical to engage a builder early in the process to ensure your plans are approved by the developer’s design panel before you even take ownership of the land. Furthermore, to maintain the estate’s standards, you will likely be required to sign a Deed Poll or “Covenant of Assumption,” which legally binds you to ensure that if you ever sell the vacant lot in the future, the new buyer must also agree to be bound by these same building rules and timeframes.

Buyers often include protective special conditions, such as finance approval, satisfactory soil testing, or town planning confirmation. These conditions allow the buyer to terminate the contract if the land proves unsuitable or funding cannot be secured. Legal review before signing is critical to ensure that the contract properly reflects your intentions and provides appropriate exit rights.

Stamp duty (transfer duty) is payable on the purchase of vacant land. As of 1 May 2025, the Queensland Government introduced an uncapped full stamp duty concession for first home buyers purchasing vacant land to build their first home. This effectively removes the stamp duty cost regardless of the land value, provided the buyer meets residency requirements.

Furthermore, the First Home Owner Grant (FHOG) has been extended until 30 June 2026, providing a $30,000 grant for eligible new builds where the total value of the land and building contract is less than $750,000.

Once land is secured, construction is governed by a building contract regulated by the Queensland Building and Construction Commission (QBCC). Most residential builds use a fixed-price domestic building contract with a licensed builder.

By law, builders in Queensland cannot request a deposit larger than:

• 10% for contracts valued between $3,301 and $19,999; or
• 5% for contracts valued at $20,000 or more.

A compliant building contract should clearly set out the approved plans and specifications, inclusions and finishes, progress payment stages, construction timeframe, and defect liability provisions. It should also address variations, delay claims, termination rights, and insurance requirements. Statutory warranties apply to protect owners against defective or incomplete work.

Before construction can begin, all required development approvals, building approvals, and permits must be obtained. This includes compliance with local planning schemes, building codes, and state overlays such as bushfire management or flood mitigation requirements.

Failure to obtain or comply with approvals can result in stop-work notices, fines, or costly rectification works. Coordination between your builder, certifier, and legal adviser helps ensure approvals are obtained correctly and on time.

Selecting a reputable and financially stable builder is just as important as the contract itself. Buyers should review the builder’s licence status, track record, insurance cover, and previous projects.

Progress payments should only be made once the corresponding stage of work is completed. Under QBCC regulations, progress claims must be proportionate to the value of work completed on-site. Final payments should not be released until defects are rectified and all compliance certificates and warranties are provided.

At completion, owners should carry out a practical completion inspection to identify defects or incomplete works. Final certificates, including occupancy approvals and compliance documentation, should be obtained before handover. Maintaining clear records of contracts, approvals, warranties, and settlement documents is essential for future resale, refinancing, or warranty claims.

Common issues include discovering unsuitable soil conditions after settlement, overlooking flood or bushfire overlays, entering into poorly drafted building contracts, or underestimating approval and infrastructure costs. These risks are best managed through early legal advice, proper due diligence, and careful contract negotiation.