If you’re planning to buy a house in the near future, you’re probably getting your credit in order, scouting out your favourite neighbourhoods, and saving up for your deposit.
But your deposit isn’t the only cost you need to consider as you plan your property purchase.
Many clients approach us, having not planned for some of the (unavoidable) costs which need to be considered and budgeted for. We have seen many individuals use their hard earned deposit to cover these costs, resulting in less cash available to buy their dream home. Don’t let this be you! Plan now for the following unexpected and unavoidable costs:
–Stamp Duty: This government tax may be waived for First Home Buyers (please seek advise for your individual circumstances), and the cost varies from state to state, depending on where your new home is located. for example, a $1,000,000 owner occupied home in Victoria will incur a one-off stamp duty fee of approximately $55,000 whilst a home of the same value in Qld will result in a one-off stamp duty cost of $30,850 and NSW’s stamp duty would be approximately $40,000.
–Land transfer fees: Another government fee which can vary from state to state, based on property location. Again a $1m property to be lived in by the owner, in Queensland me be $3,700 whilst a Victorian property may be liable for a $2,500 one-off fee approximately (please seek advice or find calculators online to use, for your individual circumstances)
–Legal Professional’s fees: This professional (usually a Conveyancer, Solicitor or Property Lawyer) represents you as the buyer and ensures a smooth purchase process by managing your property purchase from contract of sale reviews, strata contracts through to settlement.
–Home and Contents Insurance: When you certain types of properties, such as a free standing home, the lender will require you to show evidence of a building insurance policy, prior to settlement, to ensure that if something were to happen to the building that the property is covered, as the bank has a financial interest in your home, whilst you have a mortgage with them. Seek advice for your individual circumstances as to the right type of cover and insurer for your needs. If you are buying a unit/apartment which has Strata, then you may not be required to buy an individual policy-please seek advice.
–Bank Fees: Some lenders charge one-off establishment fees to cover the costs associated with new home loans. These fees cover things like valuations and legal fees incurred by the lender. Prepare to pay between $0-$1,500 in establishment fees to your chosen lender/bank.
–Valuation Fees: Usually covered in the above ‘bank fees’ but some property purchases, such as buying commercial property can result in this additional fee to the property purchaser. You will be provided with a quote by the lender, and approval sought prior to the valuation to be completed.
–Settlement Fees: This covers the cost to register your mortgage (with the government) and to transfer the land over, into your name. It can also include the cost of the (online) settlement platform used by the parties to finalise the property purchase. Your lender as well as your conveyancer/solicitor will ensure you are aware of all government fees and charges which you will be required to pay.
–Other miscellaneous fees: Removalist costs, rate adjustments, changeover of utilities etc. When moving into a new home, there are various costs which will arise such as removalists fees to get your furniture into your new home as well as establishing utilities and internet accounts (only if you require) as well as taking over the council rates from the previous property owner. It is generally a good idea to seek multiple quotes from multiple providers to determine what is most appropriate and suitable to your needs. Your legal professional will assist with council rate adjustments prior to settlement.
We always ensure to the best of our ability that our clients are fully aware of any possible fees and costs prior to purchasing their new home, so if there is anything we can do to support you on your journey to home ownership, please contact us.
*This information is general in nature and does not take into consideration your individual circumstances. Please contact us for further information.