A single part contract is often used in property transactions, especially when dealing with Self-Managed Superannuation Funds (SMSFs). Here are some key reasons why it's beneficial:

Simplified Process

• Single Contract: Instead of dealing with separate contracts for land purchase and construction, a single part contract combines both into one, simplifying the process.

• Reduced Complexity: This reduces the administrative burden and makes it easier to manage the transaction.

Financial Benefits

• No Interest During Construction: With a single part contract, there are no interest payments during the construction phase, which can save money.

• Increased Lending Capacity: It can increase your borrowing capacity as the loan is secured by a single asset.

Compliance with Superannuation Laws

• SMSF Compliance: Superannuation laws often require that borrowed funds are used to purchase a single asset. A single part contract ensures compliance with these regulations1.

Security and Assurance

• Builder Accountability: The builder is contracted to complete the project, providing more security and assurance that the project will be finished.

• Deposit and Final Payment: Typically, a deposit is paid upfront, and the balance is paid upon completion, ensuring that funds are managed effectively.

Flexibility in Investment Choices

• More Options: It allows for more flexibility in investment choices, such as purchasing house and land packages, which might otherwise be restricted.