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There are costs such as fees, taxes and charges when we buy a property that you should know beforehand. These fees will be included in your purchase as “costs” that you will be aware from your agent, broker, conveyancer, or lawyer for example: “You’ll need a deposit of 20% plus costs.”
We’ve listed together an all-inclusive list of these fees to take into payment when buying a property.
When you buy a property, the costs can include below. Let’s take a purchase of $600,000 in Victoria as an example.
• Deposit: typically 5% to 20% of the the purchase price, for example, 10% - $60,000
• Stamp duty: Calculated based on the purchase price and applicable stamp duty rate of the state – for VIC: $32,728.40 (waived for first home buyers)
• Transfer fee: Calculated based on the purchase price and applicable stamp duty rate of the state – for VIC: 1,502.50 (waived for first home buyers)
• Title search fee: $36.20
• Legal/Conveyancing fee: Typically $770 to $1100
• Building inspection: Typically $500 to $1000
• Pest inspection: Approx. $200
• Outstanding Council rates: Information should be provided with the Contract of Sale/Vendor Disclosure Statement - $750
• House and contents insurance premium: You will be required to have a current insurance policy, at least for the building replacement cover, in order to obtain a loan from the bank - $600
• Mortgage registration fee: In Victoria, it is $119.70 per mortgage registered. It is higher in other states.
• Loan application /Bank fee/s: Maybe included by the lender but usually waived at many banks - $0
• Valuation fee: May be included by the lender but usually waived at many banks - $0
• Lenders Mortgage Insurance (LMI): payable only if you borrow more than 80% LVR, or 85% LVR with some lender - $10,471.09 but can be financed by the lender too
When you add it up, besides the $60,000 deposit, for a $600,000 purchase, you will need to have cash available to cover between $4,000 to $6,000 in other costs, that is if you are a first home buyer. If this is not your first home purchase, be prepared to pay $32,728.4 in stamp duty too.
On the other side of the transaction, when you sell a property, the costs can include the below. And again, let's take a sale price of $600,000 as an example
• Loan payout: whatever is outstanding on your home loan plus accrued interest that has not been charged. If you have a fixed-rate loan, there can be additional break costs too.
• Real Estate Agent Commission: 1.5% to 3%
• Marketing & advertising fees: $500-$2,000
• Auction fees: $500
• Staging costs: $2000 - $8,000
• Discharge of mortgage fee: $116.80
• Bank discharge fee: differ between banks but typically $350
• Legal fees: typical starting from $1,000
• Removalist fees: you can do it yourself or pay someone to do it
All up, it can cost you around $18,000 to sell a property. So take this into account when you calculate your net proceeds from sale.
The awareness of these fees upfront will help you prepare better, especially if it is the first time you are going to buy or sell a property. For home buyers, we know you have been working hard to save your deposit. So we would like to help you understand more about the fees to ensure that you are well prepared and avoid unpleasant surprises.
If you need more information or any further concern, please do not hesitate to contact us.
Kind regards,
𝐾𝑖𝑒𝑛 𝑃ℎ𝑎𝑛 & 𝑃ℎ𝑢𝑜𝑛𝑔 𝑁𝑔𝑢𝑦𝑒𝑛.
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