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The Cost of Buying a House in Queensland

There’s a few different opinions on how much money you actually need to navigate the entire purchase of a house, so I’ve put together this article to give you an accurate breakdown of the various costs. I’ve based all relevant costs on a standard house valued at $400,000.

Conveyancing Costs

It is possible to do your own conveyancing; but, is highly recommended you hire a professional to do it for you and guide you through the process.  The costs associated can be broken up as follows:

  • Professional costs: This varies from solicitor to solicitor, but $880 is a fair estimate, based on my own property purchase.
  • Search fees: This covers costs associated with various searches on the property, and will change depending on which searches you opt to do. I have asked a local solicitor who has advised $800 is a reasonable estimate.
  • Settlement Notice: To lodge a “Settlement Notice” with the QLD Government currently carries a $33 charge.

For a total estimate of $1713.

Government Charges

When purchasing your home, there are a couple of government charges applicable, the first of which is the “Transfer Duty” (previously called Stamp Duty).  The best option for getting an accurate idea of how much this will cost would be to use the Queensland Government estimator, which can be found here.  As an idea, purchasing an existing home at $400,000 is likely to set you back $5,250; unless, you are a first home buyer, in which case you pay no transfer duty up to a purchase price of $500,000.

The second government charge, which is often classified as a bank fee, is a “Mortgage Registration Fee”.  This is payable at settlement so the lending institution can register their mortgage over the property – it is currently set at $175 in Queensland.

Other Costs

At settlement, you will need to pay a rates adjustment to cover Council rates, Body Corporate and other costs; which you, as the buyer, are responsible for paying from the day following settlement.  This amount can vary greatly depending on the property and time of year, but should be kept in mind when purchasing a house – your conveyancer can advise you how much this will be once they have completed the council search.  As an idea, I paid $1,430 when purchasing my own unit in March 2016, $752 being a rates adjustment and the balance being for Body Corporate fees.

Building and pest inspections are not compulsory, but are highly recommended in most cases – I will usually budget in $700 for this.

Please note: moving costs and insurances are beyond the scope of this article.

Bank Deposit

Currently in Brisbane all you need is a 5% deposit to purchase a house.  Based on a $400,000 house, this would equate to $20,000.  There are currently loan products available with no upfront or ongoing fees, but whether there are any fees applicable will, of course, depend on your personal circumstances.  When using a deposit below 20%, banks will require that you pay Lenders Mortgage Insurance (LMI); however, this charge can be added into the loan and is not needed to be paid upfront.

Total Cost of Purchasing a House in Queensland:

Based on the total of all the above figures, the likely cost of purchasing an owner-occupied house valued at $400,000 is approximately $24,018 for a first home buyer or $29,268 otherwise.  Keep in mind that for a first home buyer eligible for the $20,000 Queensland Great Start Grant: this $20,000 can generally be used to cover upfront costs and bank deposits on a brand new home (not applicable for investment or construction).

Please remember that all figures used throughout are an estimate only, and will vary depending on numerous factors.

 

References

https://www.treasury.qld.gov.au/taxes-royalties-grants/duties/transfer-duty-grants-calculator.php

https://www.business.qld.gov.au/industry/titles-property-construction/titles-property/fee-calculator

https://www.qld.gov.au/law/housing-and-neighbours/buying-and-selling-a-property/selling-a-home/settlement-day-when-selling-your-home/

https://www.qld.gov.au/law/your-rights/legal-and-property-rights/property-ownership-laws/

https://www.qld.gov.au/housing/buying-owning-home/how-and-when-to-lodge/

 

DISCLAIMER: You must not rely on the information in the report as an alternative to financial advice from an appropriately qualified professional.  If you have any specific questions about any financial matter you should consult an appropriately qualified professional.  We do not represent, warrant, undertake or guarantee that the use of guidance in the report will lead to any particular outcome or result.  The content, calculations and opinions contained in this article are of the writer only, and are not necessarily those of Blue Fox Finance.

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