The Real Cost of Buying a Property: What’s Beyond the Purchase Price?

When you’re house-hunting, it’s easy to focus on the headline number — the purchase price. But the reality is, the cost of buying a property in Australia goes well beyond what’s on the contract. For many buyers, particularly first-timers, these extra expenses can be a surprise and, if not planned for, can create unnecessary stress at the pointy end of the process.

Below, we break down the key costs you should budget for so you can approach your purchase fully prepared.

1. Stamp Duty

Stamp duty is often the single biggest extra cost when buying a property. It’s a state government tax calculated on the purchase price (and in some cases, the market value). The amount varies depending on the state or territory, whether you’re a first-home buyer, and if the property will be your primary residence or an investment.

For example, in Victoria, on a $800,000 property, you could expect to pay over $43,000 in stamp duty if you don’t qualify for concessions. It’s essential to check your state’s revenue office calculator before you buy.

2. Bank Fees

When arranging finance, banks and lenders often charge:

• Application fees (to process your loan)

• Valuation fees (to confirm the property’s worth)

• Settlement fees (to finalise the paperwork)

  
  

These can range from a few hundred dollars to over $1,000, depending on your lender and the complexity of your application.

3. Lenders Mortgage Insurance (LMI)

If your deposit is less than 20% of the purchase price, you’ll usually be required to pay Lenders Mortgage Insurance. LMI protects the lender (not you) in case you default on the loan.

For a $700,000 property with a 10% deposit, LMI could add $12,000–$15,000 to your costs. While some lenders allow you to capitalise this into your loan, that means paying interest on it over the life of the loan.

4. Transfer Fees

A property transfer fee is charged by the state government to officially record you as the owner of the property. This fee varies by state but generally ranges from a few hundred to over a thousand dollars. In Victoria, for example, it’s around $1,400 on a $800,000 property.

5. Conveyancing Costs

A conveyancer or solicitor handles the legal side of your purchase — including title searches, contract checks, and liaising with the other party’s legal representative. Costs typically range from $800 to $2,000, depending on the complexity of the transaction.

6. Building & Pest Inspections

Before signing unconditionally, it’s wise to arrange professional inspections. A building inspection can identify structural issues, while a pest inspection will check for termites and other infestations.

Expect to pay $500–$800 for a combined report — money well spent to avoid costly surprises after settlement.

7. Time & Stress Costs

While not a line item on your spreadsheet, the time and mental energy you spend searching, inspecting, negotiating, and navigating contracts is a real cost. For many buyers, especially those purchasing in competitive markets, this can drag on for months and take a toll on work, family, and personal time.

This is where working with a buyer’s agent can save you weeks (or even months) of frustration by handling research, inspections, negotiations, and due diligence for you.

Putting It All Together

On an $800,000 property in Victoria, here’s what your “real cost” might look like (approximate figures):

• Stamp Duty: $43,000

• Bank Fees: $1,000

• LMI (if applicable): $12,000

• Transfer Fee: $1,400

• Conveyancing: $1,500

• Building & Pest: $700

Total extra costs: $59,600 (without LMI) or $71,600 (with LMI)

Final Word

By planning for these costs early, you’ll avoid nasty surprises and keep your property purchase stress-free. Remember — the purchase price is only part of the picture. The “real cost” includes everything it takes to secure the keys in your hand.

If you want guidance through the entire process — from budgeting through to settlement — a buyer’s agent can ensure you’re fully prepared, help you avoid costly mistakes, and secure the right property at the right price.

📩 aly@walshbrownproperty.com.au

📞 0411 771 181

🌐 www.walshbrownproperty.com.au

*** Disclaimer: The information provided in this blog is intended for general informational purposes only. While we have made every effort to ensure the accuracy and reliability of the content, it should not be considered as personalised or professional advice. The homebuying process can vary based on individual circumstances, property types, and location-specific regulations.