Hidden costs

Buying a house for $625,000.00? That's the median house price in Ballarat in 2023. But much like when you buy a car, the ticket price isn't all you have to pay.

Buying property

Stamp duty is the one people talk about, and rightly so as it's the largest expense after the purchase price. On a $530,000.00 house, stamp duty is currently $32,570.00, with a discount available if you intend to live in the property (and a bigger discount if you're a first home buyer). If you're a foreign purchaser, this can blow out to a whopping $82,570.00. There's no cap on stamp duty, so the more expensive the property, the higher your stamp duty bill will be.

You'll also need to pay transfer of land fees, which are $1,559.00 on our example property, although they can run as high as $3,607.00 for higher priced properties.

Other government fees are also charged, such as registering a mortgage which costs $118.90. There's also PEXA fees (the online platform we use to process conveyancing transactions electronically) of $132.66. Add another $43.10 if you want to lodge a caveat when you have signed the contract (plus additional legal costs).

Don't forget your loan application fee, unless you can convince your lender to waive it. Typically this is around $600.00.

Then you need to take into account any adjustments you might need to pay at settlement, like council rates. Depending on what time of the year you settle, this could be anything up to a few thousand dollars.

Getting a building inspection or pest inspection? Add another $300-$600+ for each of those.

Title searches and property certificates for properties in the Ballarat region tend to cost between $200 and $300.

Your legal costs of $985.00 plus disbursements will also need to be paid at settlement.

And even when it's all done and dusted, you'll still need to find more money - ongoing rates, utilities, even land tax if you're not living in the property.

Your $625,000.00 house just cost you around $662,000.00 before you even moved in.

Selling property

You'll face similar costs when selling a house, meaning all of that sale price isn't going to end up in your pocket. The biggest cost is going to be a real estate agent. The average commission in Victoria is about 2% of the sale price, but it can be as low as 1.6% or as high as 4% depending on the agent, inclusions and location. You may also need to pay advertising and marketing costs on top of that, or they may be included in the commission (when charged separately, anticipate a further 0.5% to 1% of the sale price). If you're going to auction, there might also be a separate auctioneer's fee, which might be around $400-$1,000.

If a bank holds your title you'll need to discharge the mortgage at settlement. This will attract a government fee of $118.90 plus a PEXA fee of $23.98 for your bank, and a further $132.66 PEXA fee for you. Your lender will also charge you their legal fees, which are typically $300-$600.

If you've undertaken any work as an owner builder on the property, you'll need to get a defects inspection report ($300+) and potentially owner builder warranty insurance. Insurance costs vary widely depending on the cost of the work done, but you could be looking at up to $4,000.00. If the defects inspection report turns up anything that needs fixing, you'll also have to attend to that.

At settlement, your legal fees of $930.00 plus disbursements (typically $300+) will be taken from your proceeds of sale before you see any money. Your lender will also take anything you owe them.

Even when you're done selling and the proceeds of sale are in your pocket, that might not be the end of it. Have you spoken to your accountant about capital gains tax?

The $625,000.00 property you just sold might put $586,000.00 in your pocket.

Figures quoted are an estimate only and are subject to change.