When you buy a property, you can expect to spend up to 5% of the contract price on fees, duties and charges. So for a purchase of $500,000, there may be up to $25,000 of costs involved in order to complete the purchase.
The main government fees associated with buying a home are:
- Purchase stamp duty : This is the largest expense. It’s a tax levied by your state government on all property purchases.
- Mortgage stamp duty : This is a tax levied by the state government based on the size of your mortgage. It has now been abolished in most states.
- Transfer fee : This is a government fee for registering your name on the title of the property and removing the vendor’s name.
- Registration fees : This is a government fee for registering your lender’s mortgage on the title of your property. If the vendor has a mortgage on the property, then you may be charged to remove their mortgage, the cost of which will be reimbursed by the vendor at settlement.