Buying your first home is an exciting milestone, but many first-time buyers underestimate the additional costs beyond the purchase price. Understanding these hidden expenses can help you budget effectively and avoid financial strain.
Stamp Duty
Stamp duty is one of the most considerable upfront costs when purchasing property.
The amount varies by state, property price, and whether you qualify for first-home buyer exemptions or concessions.
For example, in New South Wales, first-home buyers may receive concessions on properties under a certain threshold, while in Victoria, full exemptions apply for homes under $600,000.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the property value, lenders may require Lenders Mortgage Insurance (LMI). This one-off premium protects the lender if you default on the loan, which can cost thousands, depending on the loan size and deposit amount.
Legal & Conveyancing Fees
Hiring a solicitor or conveyancer is essential for handling contracts, conducting title searches, and managing settlements. Fees generally range from $1,000 to $3,000, depending on the complexity of the transaction.
Building & Pest Inspections
A pre-purchase inspection is highly recommended to identify structural issues or pest infestations. Costs typically range from $300 to $700 but can save you from costly repairs down the line. Buying your first home is an exciting milestone, but many first-time buyers underestimate the additional costs beyond the purchase price. Understanding these hidden expenses can help you budget effectively and avoid financial strain.
Loan Application & Valuation Fees
Lenders may charge loan establishment fees, usually between $200 and $700. A valuation fee (between $200 and $600) may also apply to assess the property’s market value before approving the loan.
Council & Utility Costs
Local councils charge rates based on property value and location, ranging from $1,000 to $3,000 annually. You’ll also need to budget for utility connection fees for electricity, water, and gas, which can add up to several hundred dollars.
Strata & Maintenance Costs
If buying an apartment or townhouse, you may need to pay strata fees, which cover building maintenance and insurance. These fees vary significantly but range from $500 to $5,000 annually. Beyond the purchase price, these additional costs and taxes can significantly impact your budget. Factoring them into your financial plan ensures a smoother transition into homeownership without unexpected financial stress.
If you are looking for further information or have additional questions, speak with a trusted adviser or mortgage broker. They may be able to provide additional clarity.
Buying your first home is a major step—and knowing the full cost picture can make all the difference. Don’t let hidden expenses catch you off guard.
Let’s walk through the numbers together. Speak with our trusted property tax specialist accountant who can help you budget with confidence and access the right grants, exemptions, and loan structures for your situation.
Disclaimer:
The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.