The hidden costs of buying a home on the Gold Coast
When it comes to buying a home, there's more to it than the price of the property itself. There's a number of extra costs that you should be aware of, and budget for, when you're buying a home in Queensland.
The costs are often dependent on the value of the purchased property. Additionally, things like stamp duty and transfer fees vary dramatically from state to state so its good to do your research and be prepared.
So what are the costs of purchasing a property on the Gold Coast, QLD?
1. Transfer Duty (previously known as Stamp Duty)
Transfer duty is the tax you pay on the purchase of the property and is payable to the QLD revenue office no later than 30 days after settlement of the property.
How much transfer or stamp duty you pay is dependent on a number of factors:
the purchase price of the property
if you're a first time home buyer
if it's your primary residence
if the property is purchased as an investment
if the property is vacant land
As an example, the transfer duty for a primary residence with a purchase price of $800,000 is $21,850.
An additional duty of 7% applies to purchases of residential property by foreigners (including companies and trusts).
Use the Queensland Government Transfer Duty (Stamp Duty) Calculator to work out how much you are likely to pay.
2. Mortgage Registration Fee & Transfer Registration Fee
The mortgage registration fee is the fee you pay for formally registering a mortgage, in Queensland this is a flat fee of $195. The mortgage registration ensures that the mortgage can be viewed by a simple title search.
The transfer registration fee is the cost associated with transferring the property title into your name, how much you have to pay is dependent on the purchase price of the property.
As an example, the transfer fee for a primary residence with a purchase price of $800,000 is $2,489
The RACQ online calculator is great for working out these costs.
3. Lenders Mortgage Insurance (LMI)
Lenders mortgage insurance is a mandatory cash deposit designed to protect the lender in case you default on your loan. Should the deposit you have for the property you're buying be less than 20% you need to pay the LMI.
How much the fee is depends on the size of your deposit, the closer you get to the 20% the less you pay in LMI.
As an example, the Lenders Mortgage insurance for a home with a purchase price of $800,000 and you have a 10% deposit of $80,000 is $17,856
Use this easy to use Lender Mortgage Insurance Calculator to work out what your fees may be.
4. Mortgage application or set-up fee
The fee to establish the mortgage is dependent on the type of loan and the lender. The loan application fee is approx. $500-$600, but in some instances lenders will waive the fee, so its worth asking or shopping around.
5. Conveyancer or Solicitor Fees
Although it is possible to do much of the work yourself, it is highly recommended to use a qualified conveyancer or solicitor to provide advice and to prepare and review the legal documents for the purchase of the property.
As the process of buying a home and the conditions surrounding the purchase are different from state to state, it is an advantage to use a solicitor in the state where you're purchasing as they're more intimately familiar with the local laws and conditions.
The cost will depend on the complexity of the transaction. In general expect to pay between $800 - $1,500 in solicitor fees, and approx. $400 for property and title searches.
6. Build & Pest Inspection
As part of the process of buying a house in Queensland is a build and pest inspection. This inspection is conducted by certified inspectors who will check the property for any structural issues, damage and pests like termites. These inspections are particularly of essence for older properties where hidden damage can be a costly issue down the track.
The cost of this inspection is between $500 - $600
7. Council Rates & Utility Bills
Council and utility rates are paid in advance, generally until the end of the quarter. You'll need to pay your portion of the rates to the vendor.
This is calculated by the number of days in the quarter after the settlement date. Your portion of the rates are added to the purchase price.