Purchasing a house will cost more than the listing price suggests. Generally, you should budget for an additional 5% of the property’s purchase price to cover extra acquisition expenses.
Stamp duty on property transfer is a tax levied by the state government, which the purchaser must pay based on the property’s sale price. This tax applies to the transfer of property ownership and is due regardless of whether the property is bought outright or financed. First-time homebuyers might qualify for substantial discounts on this duty.
This is a fee imposed by state governments for recording the change of property ownership from one individual to another. Some states and territories might apply a fixed fee, whereas others use a graduated scale based on certain criteria.
This fee is an administrative cost levied by the Land Titles Office or its equivalent in each state or territory. It covers the registration of the lender’s mortgage on the property’s title record. The amount varies across different states, typically ranging from approximately $115 to $181 for each registration. This expense is borne by the borrower.
When initiating a loan application, the borrower might be required to pay an application fee or loan setup charge. This fee can differ based on the type of loan, the lender, the collateral involved, and the number of loan segments. Generally, this fee covers the expense of the initial property appraisal.
Lenders will have an independent valuer perform a valuation on the property being purchased. Whilst most lenders will add this fee into their application fee, some lenders will forward the cost of the valuation to the purchases. For a standard residential valuation, this is normally around $300-$400 per valuation.
Lender’s Mortgage Insurance (LMI) protects the lender from losses if the borrower defaults and the forced sale of the property does not cover the outstanding debt. It’s important to note that LMI safeguards the lender, not the borrower. LMI generally applies when you borrow more than 80% of the property value, although in some cases it can be waived for loans up to 95% of the property value. Talk to us today to see if you qualify to have this fee waived.
Home Buying costs FAQ
Construction costs
If you’re building a new home or undertaking a major renovation, a construction loan is designed to support the process by releasing funds in stages as the work progresses.
What Is a Construction Loan?
Unlike a standard home loan, a construction loan is drawn down in parts called progress payments to match the stages of construction. You only pay interest on the amount that has been drawn, which helps manage cash flow during the build.
Typical Progress Payment Stages:
Deposit – Paid to the builder before construction begins
Base – Covers the foundation or slab
Frame – Funds the frame and structure
Enclosed – For roofing, windows, and external walls
Fixing – Includes internal fittings and finishes
Practical Completion – Final payment after the build is complete
Why Choose a Construction Loan?
You avoid paying interest on the full loan amount upfront
Payments align with work completed, offering more protection
Suitable for building from scratch or completing a house-and-land package
Costs to Consider:
Builder’s deposits and progress payments
Site preparation and connection of utilities
Council permits and inspections
Interest and fees during construction
Lender’s valuation at each stage
When building a property, two important upfront expenses that often catch buyers off guard are site costs and service connection costs. These are essential to get your block of land ready for construction and to connect it to vital infrastructure.
Site Costs
Site costs refer to the work required to prepare the land for building. These can vary greatly depending on the condition and slope of your block.
Typical site costs include:
Soil testing and engineering reports
Excavation or levelling of the land
Retaining walls (if required)
Rock removal or difficult soil handling
Drainage and erosion control
These costs are often classified as fixed or provisional in your building contract, but it’s crucial to understand exactly what’s included. Site costs can range from $10,000 to $30,000 or more, depending on complexity.
Service Connection Costs
These are the fees involved in connecting your property to essential services such as:
Water
Electricity
Gas
NBN or phone line
Sewerage
Some estates include these in the land price, while others do not. Service connection costs can add another $5,000 to $15,000+, especially in regional or newly developed areas.
Purchase costs
When buying a property, one of the essential costs to factor in is conveyancing or solicitor fees. This covers the legal side of the transaction and ensures that your property purchase is secure, compliant, and fully protected.
What is Conveyancing?
Conveyancing is the legal process of transferring ownership of a property from the seller to the buyer. It includes reviewing contracts, conducting title searches, checking for any outstanding debts on the property, and handling settlement.
What Do the Fees Cover?
Reviewing and preparing legal documents
Property title and council searches
Managing the exchange of contracts
Arranging settlement with all parties involved
Ensuring legal ownership is correctly transferred
How Much Does It Cost?
Depending on the complexity of the purchase and the professional you choose, conveyancing or solicitor fees typically range from $1,000 to $2,500. It’s an upfront cost, but a critical one—especially when investing in high-value assets.
Before finalising any property purchase, it’s strongly recommended to arrange pest and building inspections. These inspections help you understand the true condition of the property and avoid costly surprises after settlement.
What Does a Building Inspection Cover?
A licensed inspector checks the structural integrity of the property, looking for issues such as:
Cracks in walls or foundations
Roof and plumbing problems
Poor drainage or water damage
Compliance with building standards
What Does a Pest Inspection Cover?
A pest inspection looks for signs of infestation or damage caused by termites, borers, and other timber pests that can seriously impact the value and safety of the property.
Why Is It Important?
These inspections provide peace of mind and negotiation power. If problems are found, you may be able to renegotiate the purchase price or request repairs before settlement.
Cost Range
Combined building and pest inspections typically cost between $400 and $800, depending on the property size and location.
Home Loan Education
