> ## Documentation Index
> Fetch the complete documentation index at: https://help.kenekt.app/llms.txt
> Use this file to discover all available pages before exploring further.

# How is the Single Contract Holding Cost typically calculated?

## Overview

Single-contract house and land packages have become increasingly popular, typically facilitated through partnerships between builders and financial institutions like Westpac. These arrangements allow SMSF members to purchase property as a retirement investment.

## Key Compliance Requirement

The property must serve exclusively as a retirement investment to satisfy the Sole Purpose Test. Importantly, separate land and construction contracts do not meet LRBA requirements, which can create complications if financing land and construction separately through an SMSF.

## Cost Calculation Components

When a builder funds both land and construction before completion and transfer to an SMSF, costs typically include:

**Land-Related Expenses:**

* Purchase price
* Stamp duty
* Legal fees
* Council rates
* Land tax
* Mortgage fees
* Valuation and release fees

**Construction Expenses:**

* Build price
* Associated legal fees

**Additional Holding Costs:**

* Lender fees and charges
* Interest on land and build (calculated at a stated annual percentage rate)
* GST differential
* Interest on SMSF funds

The illustrative examples showing how these components combine to calculate total holding costs are for demonstration purposes only and shouldn't serve as actual calculations.


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