Additional Costs of Buying a Home
Please note: The information in these resources has been prepared as a general guide, without knowledge of your specific situation. You should consider how appropriate the information is to your own financial situation and needs and seek your own legal advice before making financial decisions.
Whether buying a new home or land, building a home or renovating an existing property, home ownership is probably the most important and expensive purchase you will ever make.
Aside from the cost of the house or land itself and the initial deposit, there are some additional costs that need to be considered. These may include but are not limited to:
Conveyancing is the transfer of property from one person to another. Conveyancing fees vary depending on where you live and where you are buying. Ask your solicitor, conveyancer or settlement agent to give you a written estimate. Contact your local Law Society or the Australian Institute of Conveyancers (external website, new window) for the names of solicitors or conveyancers in your local area.
Whenever a property changes hands the change of ownership must be recorded with the appropriate State Titles Office. Registration fees are payable and varies by State and Territory. A document known as a Transfer of Land must be lodged by your solicitor on your behalf.
IBA will arrange a property valuation to be obtained as part of the loan assessment process. Applicants are required to meet the cost of the property valuation, and IBA will advise you of this cost.
Some lenders may charge all or some of the following:
- a loan application fee or a professional fee for mortgage preparation
- an administration fee if loan repayments are not paid by the due date
- a security dealing fee where the lender consents to a borrower initiated dealing involving a registered loan security
- a discharge fee on the formal discharge of your mortgage.
Stamp duty is a government tax that varies by state and territory.
First home buyers may be eligible for a stamp duty rebate or exemption, but the property must be your first home and your main residence. Your local stamp duty office can provide you with information on how much you will have to pay, how it is calculated and if you are entitled to a rebate, exemption or deferred payment.
The table below contains website links to the Stamp Duty Office in each Australian state. Please note that these are links to external websites and each link opens in a new window.
|Australian Capital Territory||ACT Revenue Office (external website, new window)|
|New South Wales||NSW Office of State Revenue (external website, new window)|
|Queensland||Qld Office of State Revenue (external website, new window)|
|Northern Territory||Territory Revenue Office (external website, new window)|
|South Australia||Revenue SA (external website new window)|
|Western Australia||WA Office of State Revenue (external website, new window)|
|Victoria||State Revenue Office Victoria (external website, new window)|
|Tasmania||State Revenue Office (external website, new window)|
From the settlement date (the date the sale is finalised) you are responsible for all the council and water rates on a property.
Regardless of the age of the property, it will potentially have some issues that need fixing, so before you exchange contracts to purchase a property it is necessary to ensure you have the appropriate searches and inspections done. Your solicitor or conveyancer should advise you on which of the following searches you might undertake.
- Title Search – a Certificate of Title obtained from the Titles Office by your solicitor or conveyancer provides details of who owns the property and makes sure there are no problems that would affect the transfer of title.
- Building Inspection – the cost depends on the type of property and the amount of detail required. The written report should detail any flaws, including problems with damp and the structure of the building and roof.
- Structural Inspection – this visual inspection examines the existing condition of the property’s foundations, bearing walls, beams and columns, floor, framing, crawlspace areas, and drainage. These areas are checked for deterioration and damage and any recommendations for repair are made.
- Pest Report – identify any pest infestation in the property you wish to buy, such as termites or ants that could affect the structure of the home.
Are you considering buying a unit or apartment? When purchasing into a property that has one or more owners such as a block of apartments, you need to make allowances for a range of additional ongoing costs for maintenance and insurance of the property. These include body corporate fees, contribution to sinking funds and liability insurance to cover any damage to the building and common property.
Check existing body corporate records – including the history of maintenance and provision for future maintenance – to get an idea of possible expenses in the future. And check the building’s fire rating (particularly in older apartments).
The responsibility for insurance and risk of loss can vary in each State and Territory, so check with your solicitor or conveyancer as to exactly what type of cover you will need.
- Home, Building and Contents Insurance – can protect your actual home or property and contents against a range of events including fire, theft, malicious acts, storm damage etc. Lenders will require borrowers to have Home Building Insurance.
- Building Insurance – if you are building a home, check that your builder has their own insurance in place before construction commences.
- Loan Repayment Insurance – can enable you to continue paying your loan commitments in the event of an unforeseen accident or unexpected illness.
You need to consider the cost of moving from your current location to your new home. This varies greatly depending on the removalist you choose. And you will also have utility costs such as the connection of power and phone, redirection of mail, and possibly carpet and other cleaning costs.
The Real Estate Institute of Australia (external website, new window) offer useful consumer and housing market information. Their website contains advice on buying a property, renting or leasing a property, moving house, a Glossary of Real Estate Terms and a quarterly Mortgage Choice Real Estate Market Facts report.
Housing (NSW) (external website, new window) offer a number of publications to assist with buying a home, purchasing land, building a home and making financial decisions.