Unexpected costs when buying your first home. Once you’ve found a property you can afford, it can be easy to miss many other costs associated to buying or holding a property.
In this market insight we share some cost to look out for before committing to your purchase.
Council and water rates
Once you own the property, you’ll need to pay council and water rates. Generally payable on a quarterly basis. Both mandatory costs to a home owner, you will be required to pay these on time. Council rates will provide a raft of different services, from traffic control in your area, waste management and keep the streetscapes clean and safe. Water rates will ensure your home is connected to the use of water, while its need to water the local communal space such as parks and reserves.
Owners corporation fees
Owners corporation fees are only applicable to apartments and/or townhouses that share common land. They will charge all property owners a cost, also paid quarterly to service the maintenance of the communal spaces on the property site, lift maintenance (if any), garden maintenance etc.
Conveyancing costs
Conveyancing is the process of transferring the property ownership from one entity/person to you. The also manage the preparation and lodgement of various legal documents to finalise the sale or transaction.
Conveyancing fees can cost anywhere from $600 to $1,500, depending on who you employ or how complicated the property settlement may be. This cost may be added to your loan application, but its important to learn how this will be paid as it will be incurred on day of settlement.
Stamp duty implications
The most expensive upfront cost when buying a property is stamp duty. When buying your first home, stamp duty is often waived or charged at a concessional rate. Stamp duty is also known as land transfer duty and is a mandatory tax paid as a one off expense when buying a property.
In Victoria, you may qualify for an exemption for stamp duty if the purchase price of your first home is less than $600,000. If you purchased your home for $600,000 to $750,000, you may still qualify for a stamp duty concession. The Office of State Revenue is a great source to read more about this.
Home and contents insurance cover
Owning a property will be the most expensive asset you own. It will be prudent to ensure its insured appropriately. Banks and financiers will request all applicants to have insurance before they issue finance to borrowers. You will also need to take serious consideration into contents cover. Both policies can be jointly held to ensure you are cover in the event of loss. This cost will range based on the property type, the security measures in place and the location. This can be paid monthly, quarterly or annually. It’s not necessarily cheap, so get some quotes before buying the your first home.
At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. We also do not charge fees to buyers! If you’d like to learn more, please feel free to contact us. We welcome the opportunity to help you make the best property decision.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
April 2022
