Most buyers focus on the purchase price. That is understandable. But the purchase price is only part of what you will pay. There are a dozen other costs that catch first-time and experienced buyers off guard. Knowing them upfront means no surprises at settlement.
Stamp Duty
Stamp duty is the single biggest additional cost when buying property in NSW. It is a state government tax calculated on the purchase price. For a $500,000 property, stamp duty in NSW is roughly $17,990. For a $700,000 property, it jumps to around $27,490.
First home buyers may qualify for exemptions or concessions. If you are buying a home under $800,000, you may pay no stamp duty at all. Between $800,000 and $1,000,000, a sliding scale concession applies. Check your eligibility with Revenue NSW or your solicitor.
Conveyancing Fees
A conveyancer or solicitor handles the legal side of the property transfer. This includes contract review, title searches, liaising with the vendor's solicitor and managing settlement. Expect to pay between $1,500 and $3,000 depending on the complexity of the transaction.
Do not try to save money by skipping legal representation. A good conveyancer will catch issues in the contract that could cost you far more than their fee.
Building and Pest Inspections
A building inspection typically costs between $400 and $700. A pest inspection adds another $250 to $400. Many inspectors offer a combined package for $500 to $900.
These inspections are not optional. A building report will identify structural issues, roof damage, moisture problems and non-compliant work. A pest report checks for termites, borers and other timber pests. In regional areas, termite risk is particularly high. Skipping a pest inspection to save a few hundred dollars could cost you tens of thousands in repairs.
Strata Reports
If you are buying a unit, townhouse or property within a strata scheme, you will need a strata report. This costs between $250 and $400 and reveals the financial health of the owners corporation, any pending special levies, building defects and minutes from recent meetings.
A strata report can uncover major issues. If the building needs a new roof and a $50,000 special levy has been proposed, you want to know about that before you buy.
Loan Application and Mortgage Costs
Your lender may charge a loan application fee, typically between $150 and $600. Some lenders waive this fee, so it pays to shop around. You will also need to pay for a property valuation, which the bank orders to confirm the property is worth what you are paying. This usually costs $300 to $600.
If you are borrowing more than 80% of the property value, you will need to pay Lenders Mortgage Insurance (LMI). This can add thousands to your upfront costs. On a $500,000 property with a 10% deposit, LMI could be $8,000 to $12,000.
Council Rates and Water Rates
Council rates in regional NSW vary by council area. In Wagga Wagga, annual council rates for a standard residential property typically range from $1,800 to $3,500. Water and sewerage rates add another $800 to $1,200 per year.
At settlement, rates are adjusted so that the vendor pays their share up to settlement day and you pay from settlement onwards. But these are ongoing costs you need to budget for as a homeowner.
Insurance
You will need building insurance from the date of exchange, not settlement. This is a requirement of most mortgage contracts and protects you if the property is damaged before you take possession. Contents insurance is separate and covers your belongings once you move in.
In regional areas, insurance premiums can vary based on flood risk, bushfire zones and the age of the property. Get quotes early so there are no surprises.
Moving Costs
If you are relocating to regional NSW from a capital city, moving costs can be significant. A full removalist service from Sydney to Wagga Wagga typically costs between $3,000 and $6,000 depending on the size of your household. Even a local move within Wagga Wagga will cost $500 to $1,500.
Connection and Setup Fees
Budget for connecting electricity, gas, internet and phone services. If the property has been vacant, you may also need to pay reconnection fees for water and sewerage. These individual costs are small but they add up quickly.
The Bottom Line
On a $500,000 property purchase, the additional costs can easily total $25,000 to $40,000. On a $700,000 property, that figure could reach $50,000 or more. Plan for these costs from the start, not as an afterthought.
A buyers agent will help you understand the full cost of any property before you commit. We make sure our clients go into every purchase with their eyes wide open.