Costs Involved in Buying a Property in Australia
Oh! what fun to buy a property/home in Australia. Isn’t it? But ever wondered about the overall cost of buying a home in Hampton Park, Lynbrook, or nearby suburbs. Well, if you do not know, let me tell you about all the costs that are involved while you buy a home (there are some hidden costs too).
As a general rule, besides a 10% deposit, you are required to pay off the planned project. At the same time, you should also expect to pay roughly 5% of the purchase price for other expenses associated with buying a property. (Figures are not for any specific suburb or any city in Australia)
When buying a home in Australia, it is always suggested to hire a local real estate agent. For instance, if you are looking to buy a home in Hampton Park, it is advised to hire a real estate agent of Hampton Park itself. The same goes for other suburbs like Lynbrook, Lyndhurst, and Cranbourne. The right real estate agent will keep the home buying process smooth and transparent to you.
There is a lot that goes into buying a home. Apart from the final amount, there are various hidden costs that pop up during the home buying process. So, let us see what are the type of costs involved. The below-described costs are not subject to anyone suburb but are generalized costs that are involved while buying a home in Australia.
Mortgage Registration Fee
If you are buying a property in Australia on borrowed money, it means you will have to take out the mortgage. The government would require you to formally get it registered so that it can be viewed by a simple title search. This process prevents you from selling your home without paying back the loan amount.
This fee covers the cost of transferring the title of your property. This fee is paid at the time when you have to transfer the name from the previous owner into your own. This fee is based on the consideration or value that is assessed by the Office of State Revenue.
Landgate Title Searches
Your conveyancer will be required to get searches of the property through Landgate. Each search costs $29.37 including GST. Sometimes, you may require just one search, and other times you may need several. So, it is very important to be aware of any encumbrances that may burden your land.
This is the tax you pay on the property/ home you are purchasing. The stamp duty tax changes based on the state you are purchasing the property in. Also, it varies depending on the property type (first purchase, or investment property). You can calculate stamp duty through online tools but if you have a local real estate agent with you, then you do not have to worry about anything.
This is the fee you pay when your conveyancer (a specialist lawyer who specializes in the legal aspects of selling and buying the property) advises the water, shire, land tax. If the applicable strata company of the change of ownership at the property, the above said departments charge a fee which is called enquiry fees.
In return for the fee paid, you will not only update the ownership with the government departments but also your conveyancer will receive rate information and general information they have about the property saved on their database.
Rates and Taxes
The taxes and the rates will depend on the time of year you settle. The time will decide how much you need to pay for your portion of water, shire, and if applicable, strata levies. Once the information is available, an adjustment of rates and taxes is done at the time of settlement.
Identity Verification Fee
This is done primarily to reduce the risk of fraud. By verification, you get to know if the real estate agent has the authority to buy or sell the nominated property or not.
It is required by all buyers in Western Australia to have their ID verified prior to settlement.
The identity verification service fee is $49.00 and is payable to Australia Post.
Property Exchange Australia (PEXA) is Australia’s online property exchange network.
It helps lawyers, conveyancers, and financial institutions – to lodge documents with Land Registries and complete financial settlements that too electronically.
The fee of PEXA is separate from the statutory lodgment fees. These are set by each jurisdiction’s Land Registry.
It involves the following costs:
Conveyancing Fee/Legal Advice
If you hire a conveyancer or a property lawyer, you will be well-informed on your buying decision. Also, it is guaranteed that your purchasing process will be stress-free and successful.
As per the Australian Institute of Conveyancers WA (AICWA), you are advised not to do your own conveyancing – until and unless you are familiar with the entire process.
Duties of Conveyancers
- Conveyancers prepare and lodge all the documents.
- Conduct important searches on your property, often identifying legal issues with official ownership.
- Hold your deposit safely in a trust account.
- Adjust the rates and taxes on your property.
- Liaise with your bank to settle the property matter efficiently.
The settlement fees may vary depending on the complexities of your purchase.
Building and Pest Inspections
This is important especially for homes that are old.
You can expect to pay between $400 and $600. The amount may even vary.
When you buy a property, there are a lot of inherent risks that may cause you loss or even affect your ownership.
Title insurance is specialized insurance that provides home buyers with protection against any unknown and hidden risks – the risks may arise at the time of purchase.
Do not get confused, there are many other once-off financing fees that you will have to pay.
A mortgage establishment fee is charged by the banks when you take a loan from them. The cost varies as per the establishment.
Other expenses include settlement attendance fees, also lenders’ mortgage insurance.
Mortgage insurance costs depend on the specific lender like how much money is borrowed and the size of the deposit etc.
This is essential to get a good price over your property when you are selling. A property valuation from a professional will give you a good idea of the market price. Also, they will tell you at which amount you should settle for on the home that you are interested in.
This cost is something that many people often overlook while budgeting for their actual move into their new home.
It is important to remember the different costs included like connecting utilities (gas, electricity, water, etc.), redirecting mail, the cost of cleaning your home, and so on.
Ongoing Property Costs
Once you buy a property and move in, make sure to always be wary of the ongoing fees that you may have to pay. These can include, home and contents insurance, utility connection for water, internet, gas, strata/body corporate fees (only if applicable), cleaning/garden maintenance, water and shire rates.
You must have a better idea of all the costs that are involved in purchasing a property.
Now, you can start budgeting for your dream home and start the search too.
For any queries related to real estate, buying, selling, or even renting a property in Hampton Park, Cranbourne, Lynbrook, or nearby suburbs, contact the team of best real estate agents.