What Is a Single Contract Package?
In the house and land industry, when we say a package is provided on a "single contract", it means that both the land and the build are being sold together under one legal contract—as opposed to the more common two-part contract approach (where land and construction are contracted separately).
It refers to a turnkey or completed product where:
- The buyer signs one contract that covers both the land and the construction.
- The contract is typically between the buyer and the builder/developer entity that already owns or controls the land and delivers the completed home.
Single Contract vs Two-Part Contract
| Feature | Single Contract | Two-Part Contract |
|---|---|---|
| Contracts Signed | One | Two (land + build) |
| Parties | Usually one vendor (builder or developer) | Land from developer, build from builder |
| Ownership of Land | Often builder/developer owns land until home is complete | Buyer owns land after land settlement |
| Payments | Typically at completion or staged progress | Land settles first, then progress payments for construction |
| Buyer Financing | Buyer gets one loan for the full package | Often needs a land loan + construction loan |
| Target Buyer | SMSFs | Owner occupiers, regular investments |
Creating a single contract house and land package using a third-party entity—when neither the builder nor the buyer owns the land—is a legal and logistical challenge, especially for SMSF (Self-Managed Super Fund) buyers, due to strict ATO rules. However, it can be done with careful structuring, and it’s often facilitated by a project marketer, property syndicator, or developer-controlled entity that acts as the central party. The goal is to offer a single contract turnkey package (land + build) where the buyer signs one contract—making it SMSF-compliant while ensuring the builder and land developer get paid appropriately.
Note that it is non-compliant for an SMSF investment when the investment needs to be leveraged and not otherwise.
SMSF Compliance: Why This Matters
SMSFs cannot:
- Enter into construction loans
- Sign separate build contracts (ATO ruling)
- Pay for partially completed property
SMSFs can:
- Buy completed dwellings under a single contract
- Purchase from a vendor (XYZ) offering full turnkey product
So the third-party model enables compliance by:
- Acting as a developer
- Delivering a completed product
- Shielding the buyer from construction processes
Key Risks & Considerations in using a third party structure.
| Risk | Solution |
|---|---|
| Legal structure & timing of land control | Ensure proper legal agreements (option or put-and-call) in place |
| Cash flow for progress payments | XYZ must have funding or drawdowns arranged |
| Builder insolvency risk | Use reputable builders and secure guarantees |
| Delays in registration or build | Include appropriate conditions and sunset clauses |
| Stamp duty implications | Confirm with a property lawyer based on timing and jurisdiction |