You’re buying a home, but the asking price isn’t the end of the costs. There are extras to factor in before you buy a home, when you settle, and even some after you’ve moved in.
That’s not to say buying a home is unaffordable or too expensive, since many of the costs are minor in the big scheme of things. As a savvy buyer, it’s always better to know the real cost of a home, so you can plan your purchase with all the facts.
If you’re building a new home in Queensland, some of the costs will be different. We’ll cover both so you can get the full picture.
Luckily, if you’re buying or building in Queensland, you might be able to take advantage of some helpful government grants. Even more fortunately, Queensland offers some of the best incentives in the country.
Before we explore the full costs of buying a home in Queensland, remember this:
On paper, those look like a lot of expensive things.
But once broken down, the costs are minimal, and a good mortgage broker or property group will factor the expenses into your deposit and loan. They should also set a limit for your borrowing amount, so you have plenty of buffer in your income and repayments to pay for ongoing maintenance and rates.
Costs of buying a home in Queensland
Before you buy a home, you may have to pay for:
- Transfer duty/stamp duty
- A land tax clearance certificate
- Real estate agent fees (if you’re buying an existing home)
- Legal fees
- Conveyancing costs
- Any search fees, such as a Title search/mortgage registration
When you buy, you might need to factor in:
- Bank fees for your loan
- Home and contents insurance
- Any moving costs
- Utility connections, such as internet and electricity
- Other essentials like smoke alarms
After you’ve moved in, there are also:
- Ongoing council rates
- General maintenance costs
Let’s look at what an average $500,000 property with extra costs might look like in real dollars:
Property cost | $500,000 |
Legal and conveyancing fees | $500 – $1300 |
Pest and building inspection | $350 |
Stamp Duty/Transfer Duty | $0 (first home buyers) – $8750 |
Mortgage registration fee | $197 |
Transfer fee | $1381 |
Loan application fee | $197 |
Lenders Mortgage Insurance (if applicable) | $0 (if 20% deposit) or $8000+ |
Council rates | Approximately $500 per quarter |
TOTAL COSTS | $511,425 (First Home Buyer with LMI) $520,115 (Not a first home buyer) |
There are plenty of variables to take note of in this example.
- Lenders Mortgage Insurance (LMI): if you nab a 2% deposit loan, your LMI may be higher. Or, you might find a lender who waives LMI completely, especially if you’re in a low-risk profession like the medical field. You may be able to avoid LMI if you apply for the Family Home Guarantee, which is a government grant for single-parent families, or the First Home Loan Deposit Scheme if it’s your first home.
- Ongoing costs: this example doesn’t include rolling expenses such as home and contents insurance, because premiums can vary enormously depending on your property size, value, and the worth of your own furnishings and fittings. You can go online for a quick home and contents insurance quote for a general idea.
- Moving costs: you might be using friends and family for moving day, moving a suburb away, or moving cross-country. The difference in cost can be hundreds of dollars.
- Buying new: if you’re buying or building a brand new home, there are some costs that won’t apply, like pest and building inspections.
- First Home Owners grant: if you’re buying your first property, you might be eligible for Queensland’s $15,000 First Home Owners grant, which is a cash boost you can use as part of your deposit. It can be helpful in offsetting the extra costs of property buying.
Let’s break down each of the known costs, as well as some others you might encounter along the way.
Legal and conveyancing fees
When you buy a home, you’ll likely need to hire a conveyancer or solicitor to take care of the legal paperwork.
Technically, you could do the job yourself, but it’s highly recommended to employ a professional to complete the documents and take you through the transfer of sale.
Approximate cost: $500 – $1300
Pest and building inspection
If you’re buying an existing home, you should have a pest and building inspection carried out by a professional. They’ll check for damage, structural issues, termites and other harmful critters.
You won’t have to pay any pest and building inspections if you’re buying or building new, and you’ll have the added bonus of the home being under builders’ warranty if any problems crop up after completion.
Approximate cost: $350 -$650
Stamp Duty/Transfer Duty
Stamp Duty, also called Transfer Duty, is a tax paid on the transaction of land or property in Australia.
Stamp Duty can be a little complex, because it’s calculated based on the value of your property, but also offers sliding-scale concessions for certain buyers. You can estimate the amount of stamp duty you’ll owe using the official Queensland stamp duty calculator.
The Queensland Government waives Stamp Duty for first home buyers purchasing a home valued under $540,000.
Anything valued over $540,000 is charged at a base duty rate (dependent on the property value), plus a fee per $100, minus the first home buyer concession if applicable.
Using our $500,000 property example, you could expect to pay $8,750 if you’re not eligible for the first home buyer stamp duty concession.
Approximate cost: $0 for first home buyers, $8,750+ for everyone else
You won’t have to pay any pest and building inspections if you’re buying or building new, and you’ll have the added bonus of the home being under builders’ warranty if any problems crop up after completion.
Approximate cost: $350 -$650
Mortgage registration fee
Applying for and paying the mortgage registration fee in Queensland allows your mortgage to be viewed by a title search. It’s a protective measure to make sure you don’t sell the home without paying back the lender.
Cost: $195
Transfer fee
The transfer fee is another government fee, based on the value of your property. A $500,000 home incurs a $1,381 transfer fee, while an $800,000 home will set you back $2,491.
There’s no concessions for the government transfer fee, and it’s not affected by first home buyer status, or the type of property you buy.
Approximate cost: $1,381 for $500,000 property
Loan application fee
You’ll have to pay for the privilege of setting up a loan with your lender. The cost can vary significantly depending on competition between lenders, and what deals you can get through your mortgage broker.
It’s always worth asking if the lender will waive the application fee. Your mortgage broker or property group can apply on your behalf.
Cost: $197
Lenders Mortgage Insurance (LMI)
LMI will only apply if your deposit is less than 20% of the value of your property. It’s an insurance policy set in place by the lender in case you default on your repayments.
Your mortgage broker can help you calculate the amount of LMI you might owe, and factor it into your loan. That means you’ll pay interest on your LMI over the life of the loan, but it’s a great option if you have a smaller deposit.
For a $500,000 home with a $50,000 deposit (90% loan-to-value ratio), your LMI will be around $8,000.
Cost: Not applicable if your deposit is 80% LVR or more, otherwise $8,000 or more depending on deposit amount
Council rates
When you buy property, you’ll need to pay your portion of the rates owing for the quarter. It’s usually included in the purchase price of the property, but that’s not always the case.
Council rates vary between districts, so you’ll need to search the rates in your neighbourhood for an accurate figure.
As a side note, a newly built home can help offset council rate costs by being more energy efficient than older, established homes.
Approximate cost: $500 per quarter
How to minimise extra fees
Don’t be deterred by the extra costs in buying a home in Queensland. They’re part and parcel of any land transfer, and there are ways to curtail your extra expenses.
The easiest way is to use a professional service like an experienced property group that will work on your behalf to keep costs down.
Insignia Homes offers full handling of your paperwork, loan applications and assessment of fees, so we can get the best possible outcome for your new home purchase.
