What buying a home really costs

Almost every first buyer budgets carefully for a deposit and then discovers a second, unbudgeted pile of costs sitting on top. None of them are enormous on their own. Together they routinely add up to tens of thousands.

Stamp duty

Usually the largest cost after the deposit itself. It's a state tax on the transfer of property, calculated on the purchase price, and it varies significantly between states and territories.

First home buyers often pay reduced duty or none at all below a certain price - thresholds differ everywhere, so this is worth checking specifically for your state and your price bracket. See our guide to government schemes. If you're not a first home buyer, assume you're paying it in full and budget accordingly.

Conveyancing or solicitor's fees

Someone has to check the contract, handle the searches and manage settlement. Expect roughly $1,500 to $3,000, depending on your state and the complexity of the property.

Worth paying properly for. A good conveyancer catches things in a contract that cost far more than their fee.

Building and pest inspection

Typically $400 to $800, sometimes more for a large or unusual property. For an established home this is not optional in any sensible world - it's the cheapest insurance you'll ever buy against a $40,000 problem in the roof.

If you're bidding at auction you'll need this done before the day, and it's money you lose if you don't win. Painful, but far less painful than the alternative.

Loan costs

• Application or establishment fee - anywhere from nothing to around $600, frequently waived
• Valuation fee - often covered by the lender
• Lenders Mortgage Insurance - if your deposit is under 20%. See our guide to deposits and LMI
• Mortgage registration and transfer fees - government charges, usually a few hundred dollars

The ones nobody warns you about

• Council and water rates adjustments. At settlement you reimburse the seller for rates they've already paid covering the period after you take over. It's fair, and it's a surprise.
• Home and contents insurance. Most lenders require the property insured from the date of settlement - sometimes from exchange. You'll need it in place before you get keys.
• Strata reports and body corporate levies, if you're buying an apartment. Read the minutes; they'll tell you whether a special levy is coming.
• Moving. A few hundred for a van and some pizza, or a few thousand for a proper removalist.
• The empty-house effect. Curtains, a fridge that fits, a lawnmower, the thing that broke the first week. Budget something, because it will be more than nothing.

What we do about it

When we work out your numbers, we build the whole picture - deposit, stamp duty for your state, LMI if it applies, and an allowance for the rest - so the figure you're planning around is the real one rather than just the deposit.

It's a less exciting number than the one on the property listing. It's the one that stops you being caught short.