The upfront costs of buying a home in Australia

Most buyers plan carefully for the deposit and then discover a second, unbudgeted layer of costs sitting on top of it. Transfer duty is the largest of these, but it is not the only one, and almost none of them can be added to the loan. They must be paid in cash, most of them at or before settlement.

On an established purchase the costs beyond the deposit commonly fall between roughly 4 and 6 per cent of the purchase price for a buyer paying full duty, and considerably less for an eligible first home buyer in a state with generous relief. This article sets out each item, indicates the usual scale, and shows two complete worked examples.

Costs before you buy anything

A number of costs are incurred whether or not the purchase proceeds, and buyers who inspect several properties may pay some of them more than once.

• Building and pest inspection. A combined inspection on a standard house commonly costs in the region of $400 to $800, with capital cities at the upper end and prestige or older properties higher again. For a strata apartment a strata report is the equivalent, and reviews the owners corporation records, levies, planned works and any special levies. A buyer who is outbid at three auctions may pay for three inspections.
• Contract review. Having a conveyancer or solicitor review the contract before signing is usually charged separately from the conveyancing itself, or included in a fixed fee if the purchase proceeds with that firm.
• Valuation. Usually arranged and paid for by the lender, but some lenders pass on the cost, and a buyer who commissions an independent valuation to challenge a low lender valuation pays for it themselves. The guide to property valuations for home loans explains when that is worth doing.

Skipping inspections to save a few hundred dollars is a false economy on any purchase where defects are plausible. In most states there is no general right to withdraw once the cooling off period ends, and in Western Australia and Tasmania there is no statutory cooling off period at all.

Transfer duty

Transfer duty, still widely called stamp duty, is the largest single cost after the deposit for most buyers. It is levied by each state and territory on a sliding scale, so the average rate rises with price, and it varies considerably between jurisdictions. On a $750,000 established purchase, indicative 2026-27 duty for an owner-occupier who is not a first home buyer is roughly $27,937 in New South Wales, $40,070 in Victoria and $19,600 in Queensland.

First home buyer relief can remove it entirely. On the same $750,000 purchase an eligible first home buyer pays nothing in New South Wales, where the exemption extends to $800,000, about $10,925 in Queensland, and about $40,070 in Victoria, where relief ends at $750,000. The full state by state position, including the ACT's removal of duty for eligible first home buyers from 1 July 2026, is set out in the guide to stamp duty on property purchases, and the stamp duty calculator produces figures for any price and buyer type.

Legal and conveyancing costs

Conveyancing covers the legal transfer of title: reviewing the contract, conducting searches, preparing transfer documents, calculating adjustments and attending settlement. Professional fees commonly fall in the range of roughly $700 to $2,500 depending on the state, the complexity of the transaction and whether a solicitor or a licensed conveyancer is engaged.

Search and disbursement costs sit on top of the professional fee and are charged at cost. They typically include title searches, planning certificates, land tax clearance, water and sewerage diagrams, council rates certificates and, where relevant, owners corporation certificates. A quoted fee should be checked to see whether disbursements are included or additional, because the difference can be several hundred dollars.

Lender and government registration fees

These are individually small and collectively worth knowing about.

• Loan application, establishment or settlement fees. Charged by many lenders, often several hundred dollars, and frequently waived on package loans that instead carry an annual fee.
• Lender's legal or settlement agent fee. Charged by some lenders for attending settlement.
• Transfer registration fee. Paid to the state land titles office to register the change of ownership. Fees are set by each jurisdiction, indexed annually, and in several states scale with property value.
• Mortgage registration fee. Paid to register the lender's mortgage on title, generally a fixed amount of roughly $150 to $250 depending on the jurisdiction.
• Electronic settlement fees. Charged for use of the electronic lodgement network through which almost all settlements now occur.

Registration fees change on 1 July in most jurisdictions, so a figure quoted in a previous financial year should not be relied upon.

Lenders mortgage insurance

Where the deposit is below 20 per cent, mortgage insurance is generally payable unless the buyer uses a government guarantee or a family guarantee. It is the one large cost on this list that can usually be capitalised into the loan rather than paid in cash, which is why it is frequently overlooked in a cash budget and then quietly repaid with interest for 30 years.

Premiums rise steeply as the deposit falls. On an indicative basis, a $750,000 purchase attracts a premium of roughly $5,700 at a 15 per cent deposit, $12,150 at 10 per cent and $26,400 at 5 per cent. The detail is in the guide to lenders mortgage insurance, and the LMI calculator estimates the premium at any deposit.

Insurance

Buyers of a house are generally required by the lender to hold building insurance from the date of exchange or settlement, and most contracts place the risk on the buyer from a defined point. The first annual premium is therefore a settlement cost. Buyers of a strata apartment do not insure the building, which is covered by the owners corporation, but should hold contents insurance and check the strata insurance is adequate.

Lenders commonly require a certificate of currency naming the lender as an interested party before they will release funds, so the policy must be arranged in advance rather than on settlement day.

Settlement adjustments

At settlement the conveyancer apportions outgoings between seller and buyer, so that each pays for the period they own the property. Because councils, water authorities and land tax offices bill in advance for a period, a seller who has already paid is reimbursed for the unexpired portion. This is a genuine cash cost to the buyer on the day, and it is easily forgotten because it does not appear in any advertisement.

The items usually adjusted are council rates, water and sewerage charges, owners corporation levies for a strata property, and land tax where it applies. Where the property is tenanted, rent and the rental bond are also adjusted. The amount depends on where in the billing cycle settlement falls, and can range from negligible to a few thousand dollars.

Moving and establishment costs

These fall outside the settlement statement but are real and immediate.

• Removalists, commonly several hundred to a few thousand dollars depending on distance and volume.
• Connection of electricity, gas, water and internet.
• Cleaning, and often immediate repairs or locks.
• Where the buyer is also renting, the overlap between the end of a lease and settlement.
• Furniture and appliances for a first home, which frequently exceed expectations.

Two worked examples

The following figures are illustrative only and use indicative 2026-27 duty schedules. Professional fees are placeholders at the middle of the usual range and should be replaced with actual quotations.

Example one: a New South Wales owner-occupier who is not a first home buyer, purchasing at $750,000 with a 20 per cent deposit.

Item	Amount
Deposit at 20 per cent	$150,000
Transfer duty	$27,937
Conveyancing and searches	$1,800
Building and pest inspection	$650
Loan application and settlement fees	$600
Transfer and mortgage registration	$400
Building insurance, first year	$1,400
Council and water rates adjustment	$900
Removalists	$1,200
Total cash required	$184,887

The costs other than the deposit total $34,887, which is 4.7 per cent of the purchase price. A buyer who had saved exactly $150,000 believing they had a 20 per cent deposit would in fact be almost $35,000 short, and would be pushed into a higher loan to value ratio and mortgage insurance.

Example two: a New South Wales first home buyer purchasing the same property at $750,000 using the Australian Government 5% Deposit Scheme.

Item	Amount
Deposit at 5 per cent	$37,500
Transfer duty, exempt below $800,000	Nil
Conveyancing and searches	$1,800
Building and pest inspection	$650
Loan application and settlement fees	$600
Transfer and mortgage registration	$400
Building insurance, first year	$1,400
Council and water rates adjustment	$900
Removalists	$1,200
Total cash required	$44,450

The contrast is instructive. The same property requires $184,887 in one case and $44,450 in the other, and the difference is almost entirely the deposit, the duty exemption and the mortgage insurance avoided by the guarantee. The second buyer, however, takes on a $712,500 loan rather than a $600,000 loan, with repayments roughly $675 a month higher at an assumed 6.00 per cent, and begins with very little equity.

Where the costs differ: apartments, new builds and investment purchases

The list above describes a straightforward established house purchase. Three common variations change it.

• Apartments and townhouses. A strata report replaces a building and pest inspection, building insurance is held by the owners corporation rather than the buyer, and quarterly levies are adjusted at settlement. Levies themselves are an ongoing cost rather than an upfront one, but a special levy already struck for remedial work can be substantial and should be identified in the strata records before exchange.
• New builds and house and land packages. Duty is often assessed on the land alone where the land and building contracts are genuinely separate, which can reduce it considerably. Against that, the buyer funds progress payments during construction and pays interest on the drawn balance throughout, as set out in the guide to construction loans and progress payments.
• Investment purchases. Duty is higher in Queensland and the ACT, which apply lower schedules only to owner-occupiers. Landlord insurance replaces ordinary building insurance, and depreciation schedules prepared by a quantity surveyor are a worthwhile early cost because they support deductions for the life of the ownership.

The deposit paid at exchange is not the same as the deposit

A frequent source of confusion is that two different amounts are both called the deposit. The deposit paid to the seller's agent at exchange or on the fall of the hammer is customarily 10 per cent of the price, although a smaller deposit can sometimes be negotiated, and in New South Wales it is common to pay 0.25 per cent at exchange with the balance before the cooling off period ends.

The deposit in the lending sense is the portion of the price not borrowed. A buyer with a 20 per cent deposit still needs 10 per cent of it available on the day of exchange, which may be days or weeks before settlement, and it must be in cleared funds. Money locked in a term deposit maturing after exchange is not available. Deposit bonds and bank guarantees exist as substitutes where cash is genuinely tied up, at a cost.

Planning the cash position

Three practices reduce the risk of arriving at settlement short.

1. Budget costs as a percentage of the price, not a fixed sum. For a buyer paying full duty, 5 per cent of the purchase price is a reasonable initial allowance for everything other than the deposit, refined once duty and quotations are known.
2. Obtain written quotations early. Conveyancing, inspections and insurance can all be quoted before a property is chosen.
3. Retain a reserve after settlement. A household that spends its last dollar at settlement has no capacity to absorb a failed hot water system or a rate rise. A reserve of several months of repayments is a reasonable target, and holding it in an offset account reduces interest while remaining accessible.

The deposit calculator models the savings position including costs, and the property affordability calculator works backwards from available funds to a realistic purchase price. The wider sequence of a first purchase is set out in the first home buyer guide.

Figures in this article are indicative and provided to show scale. Professional fees, registration fees and insurance premiums vary and should be confirmed by quotation, and duty should be confirmed with the relevant revenue office. This is general information and not personal advice. Buyers who would like their full cash position modelled may request a free assessment from an accredited broker.