Find out about the additional costs of buying property in Australia...
The fees associated with buying a home in Australia are usually lower than in many other countries, the maximum being around nine percent and the minimum, with stamp duty discounts much lower. Total fees are usually between four and five percent. Most fees are calculated as a percentage of the value of the property you're buying, therefore the more expensive a property, the higher the fees. Even removal costs are higher if you have a large house (unless you have a lot of empty rooms). If you're buying and selling, you must consider the cost of both transactions. Bear in mind that fees change regularly and, in the current slow market, there are calls to reduce or abolish some of them, particularly state taxes such as stamp duty.
Stamp duty (known as transfer duty in QLD and duty in TAS) accounts for the largest slice of the fees involved in a property purchase and is payable on property transactions in all states, although rates and concessions vary considerably. Rates, which are calculating on a sliding scale in relation to the purchase price of a property, are published by state tax offices, whose websites include stamp duty calculators. They are anywhere between 1.25 and 6.75 percent of the sale price. Stamp duty must be paid within three months of purchase. There are many stamp duty calculators on the web, for example yourmortgage.com.au.
All states offer discounts or concessions on stamp duty for first-home buyers (including new migrants) and some also offer discounts for the purchase of a principal home (you must usually live in the property for at least six months to qualify).
Land Transfer Registration Fee
This fee is payable to the Land Titles Office for recording a change of owner. It's either a flat fee or a variable fee based on the price paid and varies considerably with the state. As a rough guide the fee is between 0.01 and 0.06 percent of the purchase price (paid by the buyer).
Legal and Conveyance Fees
Legal and conveyance fees may vary according to the work involved and also vary from state to state, from around $550 in Adelaide, Perth and Hobart to around $1,750 in Brisbane for a property costing over $100,000. The fees in most states are within the $550 to $1,100 range or 0.5 to 2 percent of the price (the seller pays a similar amount).
Lawyers and Conveyancers
Lawyers and conveyancers are generally free to set their own fees for conveyancing and should provide a written estimate of their fees in advance. In WA, however, conveyancers' (settlement agents') fees are set according to a fixed scale (see the Settlement Agents Supervisory Board website for details). Always check what's included in the fee and whether a quoted fee is 'full and binding' or just an estimate. A low basic rate may be supplemented by much more expensive 'extras' (called disbursements) such as costs relating to title searches, debt certificates and courier charges.
A range of fees is associated with mortgages, including a mortgage application or establishment fee, a valuation fee, legal fees, mortgage stamp duty, maintenance fees and a loan registration fee.
Inspection or Survey Fees
Although it isn't compulsory to have a building inspection or a structural survey carried out, it's often wise, particularly when you're buying an old detached house. For a survey of a one bedroom apartment you should expect to pay from around $400, for a two-bedroom apartment or house from $450 and for a four or five-bedroom house from around $600. Fees vary considerably and may depend on exactly what's included or omitted from an inspection. A termite and pest inspection costs from around $150 to $250 and may be paid by the vendor or buyer, or shared. Strata inspections cost from around $200-$250.
It's invariably a condition of lenders that properties are fully insured against structural and other damage. It may be necessary to insure a property from the day you sign the purchase contract and you should allow for the cost of this in your calculations.
You also usually need to pay utility connection (or reconnection) fees for electricity, gas, telephone and water supplies. Removal costs must also be taken into account, as must property running costs, which include a caretaker's or management fees if you leave a home empty or let it, maintenance fees for a community property, building and contents insurance, property taxes, and standing charges for utilities (electricity, gas, telephone, water). Annual running costs usually average around two to three percent of the cost of a property.