House to Home: 5 Unexpected Expenses

January 6, 2022

Owning a home is the ultimate dream for most people. When preparing to buy a home, you likely already know the main costs involved especially the deposit and mortgage repayments. There are, however, a vast array of hidden costs that come with buying your home that you may not be prepared for. Let’s bring some of these unexpected expenses to your attention today.

Table of Contents

Property Taxes and Transfer Duty Conveyancing and Legal Fees A Vast Array of Maintenance Costs Building Inspection Fees Building and Homewares Insurance Other Hidden Expenses Be the First to Know About Properties for Sale

Property Taxes and Transfer Duty

Off-Market House for Sale: Buyer Guide When you buy a home, you’ll need to pay property taxes quarterly. Although you’re exempt from paying land taxes on your primary home in Australia, you still need to pay property taxes to your local city council. The rates vary from council to council and they include:
  • General rates
  • Utility rates
  • Special rates
Councils use these payments to fund public goods and services such as roads, bridges, parks, gardens, and so on. You’ll also need to pay stamp duty or transfer duty which varies by state but is roughly 3 to 5%. Note: Stamp duty is what you pay to the government when property changes ownership. You’ll get an exemption from paying stamp duty if you’re a first-time homebuyer buying a property below a certain threshold, depending on your state. You can use a stamp duty calculator to see how much you’ll need to pay.

Conveyancing and Legal Fees

While it’s possible to handle the purchase of your house yourself, it’s usually advisable to have the help of a conveyancer or solicitor to avoid costly mistakes. The legal team will advise you and help prepare all the necessary documents to complete the purchase. They also review the sales contract for any red flags and conduct a search, which costs upwards of $250 to determine if the seller legally owns the property. Conveyancing service providers charge from $800 up to approximately $1,500 depending on which city you’re in.

Comparing Conveyancing Costs By City

Location Search cost($) Professional fee($)
Brisbane 350–500 1200–1450
Melbourne 270–350 600–800
Sydney 350–450 750–1000
Remember, the fee will also vary depending on the size of the home. You’ll only know how much you’ll have to pay when you consult the legal team. Be prepared for these expenses, so you aren’t caught unawares.

A Vast Array of Maintenance Costs

Off-Market House for Sale: Buyer Guide In the excitement of buying a house, many forget to plan for the cost of utilities, maintenance, repairs and renovating. Some regular upkeep costs may include:
  • Electricity, gas and water bills
  • Garden maintenance
  • Cleaning the house
As a rule of thumb, set aside at least 1% of the cost of the property every year for maintenance. For instance, if the property is worth $1 million, you should strive to set aside around $10,000 every year. If your house comes with attractive amenities like a swimming pool, you’ll need to plan for higher maintenance costs. For instance, it can cost you over $800 per year for pool maintenance alone; that’s even before you consider the electricity bill. Keep these costs in mind when you choose the right property for your budget.

Building Inspection Fees

Top 3 benefits of selling off-market It’s necessary to inspect the home you’re buying to make sure you’re not inheriting any problems. An inspection can save you lots of money for upgrades and give you some peace of mind knowing your newly acquired house is in good shape before you close the sale. Inspectors will check for:
  • Plumbing issues
  • Safety hazards
  • Illegal additions and renovations
  • Stability of the roofing
  • Integrity of gutters
  • Structural problems that warrant renovations
Building inspection costs vary, but typically you’ll pay:
  • $200–300 for small homes
  • $400– 500 for a medium-sized house in regional areas
  • $800–1000 in capital cities and metros
You’ll also need pest inspection to ensure that your home-to-be has no rodents, termites and other pesky infestations that can cause sickness and significant damage. You’ll pay roughly $100 to $150 for pest inspections. You can’t pinpoint with certainty how much you’ll pay beforehand, so keep it at the back of your mind to leave room in your budget for all necessary inspections.

Building and Homewares Insurance

5 ways to save for a house deposit From the moment you sign the ownership deal, you want your home insured. Anything can happen and it’s too risky to wait until you move into the property before you insure the house. You’ll need several insurance covers to protect your home, such as:
  • Building insurance
  • Title insurance
  • Landlords insurance
Depending on the risk factors associated with your location, it will cost you anywhere from $1,000 to over $25, 000 in premiums to get the cover you need. For example, you’ll pay more in areas with a high risk of cyclones like North Queensland. Communicate with your insurers to get a quote before you conclude the deal. Once you complete the purchase, you’ll also need to insure the contents of your home. Home contents insurance covers a wide range of homewares such as:
  • Carpets
  • Curtains and blinds
  • Washing machines
  • TV and entertainment systems
  • Kitchen appliances

Other Hidden Expenses

The expenses we’ve discussed are important costs you should strive to factor in when planning to purchase a house in Australia, but the list is not exhaustive. Here’s a table with other expenses you’ll need to take into account.
Unexpected Expenses What You're Paying For
Mortgage Expenses
  • Mortgage registration fee
  • Mortgage insurance
  • Mortgage registration fee registers the property as security for the loan.
  • Mortgage insurance covers your lender for losses in case you can’t settle your loan.
Loan Application Fee
  • Charged by banks and financial institutions to cover the cost of processing and admin.
Property Valuation
  • Lenders pay an independent valuer to assess the property.
Homeowners association fees
  • Depending on the location of your property, you may be required to join an association.

Be the First to Know About Properties for Sale

Get first dibs on pre-market and off-market property listings Once you know what to expect in costs, it’s time to dive into the market and make your purchase. With many people racing to buy property, how do you position yourself to get your dream home before everyone else? Enter Listing Loop. At Listing Loop, we help make sure that you get wind of properties that are up for sale quickly and easily. We specialise in off-market or secret listings, meaning homes for sale are available the moment they're for sale - well before they hit mainstream real estate markets. No need to spend your weekends pouring through house listings. All you need to do is register and give us the criteria for your dream home. When a property that matches your preferences comes up for sale, we’ll let you know about right away.

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