What determines your budget for a house and land package?

There are three things that determine your budget:

Your income, debts, family situation etc: which determine your borrowing capacity. (Find an article here about what determines how much you can borrow.)
Your deposit - the amount you saved could be a limiting factor. If a bank is willing to lend you only up to 95% of the value of a package and you have saved $20000, you have enough deposit for a $400000 but are $10000 short for a $600000 package. Instead of a deposit you could use a guarantor (read more about guarantors here).
The repayments you’d be comfortable paying. Just looking at what the banks are willing to give you could have you end up with a mortgage that you’re not happy with once you get the keys, stopping you from living the life you want. Have a look at a comparison schedule for repayments here. As future interest rates are unknown, you might want to consider them going up at some stage and allow for that in your decision making process.