The Costs of Buying a House in QLD
There’s a few different opinions on the costs of buying a house in Queensland, 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. It is however important to remember that everyone's situation is different, and you are always best to speak to a Mortgage Broker in Brisbane for a free proposal on expected costs.
Conveyancing Costs when buying a house in QLD
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 cost estimate of $1713.
Government Charges
When purchasing your home, there are a couple of government charges applicable, the first of which is the Stamp Duty. The best option for getting an accurate idea of how much this will cost would be to use the stamp duty estimator, which can be found here. As an idea, purchasing an existing home at $400,000 is likely to set you back $5,250 in stamp duty; unless, you are a first home buyer, in which case you pay $0 stamp duty up to a purchase price of $500,000.
The second government charge is the Transfer Fee, which is payable regardless of your 'first home buyer' status. For a $400,000 house, the transfer fee is $957. You can find an estimate for other prices here.
The final 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 $187 in Queensland.
Other Costs when buying a home
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. Assuming rates are paid quarterly (not annually, as in my case), and you are not purchasing a property on a Strata title (unit, townhouse etc), you probably won't pay more than a few hundred. I'll factor in $500 as an estimate.
Building and pest inspections are not compulsory, but are highly recommended in most cases – I will usually budget in at least $500 for this.
Please note: moving costs and insurances are beyond the scope of this article.
Home Loan Deposit
Currently in Brisbane all you usually need is a 5% deposit to purchase a house, however please refer to how much deposit do I need to buy a house in Qld for eligibility and details (and why you might want a bigger deposit). 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.
TLDR; Table of estimated costs for a $400,000 house in QLD
| Purpose | Cost for first home buyer | Cost for second+ home buyer |
|---|---|---|
| Conveyancing Costs | $1,713 | $1,713 |
| (GVT) Stamp Duty | $0 | $5,250 |
| (GVT) Tranfer Fee | $957 | $957 |
| (GVT) Mortgage Registration | $187 | $187 |
| Rates/Body Corp Adjustment (Est.) | $500 | $500 |
| Building & Pest (Est.) | $500 | $500 |
| Home Loan Deposit (Min.) | $20,000 | $20,000 |
| TOTAL COST | $23,857 | $29,107 |
Total costs of Buying a House in QLD - Conclusion
Based on the total of all the above figures, the likely cost of purchasing an owner-occupied house valued at $400,000 in Queensland is approximately $23,857 for a first home buyer or $29,107 otherwise. Keep in mind that for a first home buyer eligible for the $15,000 Queensland Great Start Grant: this $15,000 can sometimes be used to cover upfront costs and bank deposits on a brand new home (not applicable for investment or construction).
What's that you say? What if you want to spend more than $400,000, because $400k isn't going to get more than a shack in the inner suburbs of Brisbane? Glad you asked. Stamp duty up to $500k will be nothing for a first home buyer, but just always use a calculator, I generally prefer this one. Your minimum deposit will always be 5% of the purchase price, and the other costs will be roughly the same. If you're feeling lazy and don't want to figure this out, give me a call and I'll help you crunch those soul crushing numbers: 0466 392 717.
What to do next?
Get your finances in order. If you have at least a 5% deposit and want to get an idea of what you can/can't do, I'd highly recommend talking to a Mortgage Broker. If you appreciate the information in this article, please give me a call and I'd be happy to assist you and guide you through - I won't cost you a thing!
Additional incentives
I get a lot of emails from various professionals, and one that recently caught my eye was a $20,000 cash back when constructing with their preferred builder (with a valuation guarantee). These houses were generally priced around $500k (outer suburbs of Brisbane), and would be built brand new. $20k from the builders + $15k FHOG is almost going to cover all the costs involved. Call me if you want to know more.
Please remember that all figures used throughout are an estimate only, and will vary depending on numerous factors.
References for "Costs of Buying a House in QLD":
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.