What Are The Real Costs When Buying A House In Melbourne?

You’ve found a home in Melbourne advertised for $700,000. You’ve worked out your deposit, spoken to the bank and started imagining where the furniture will go. But what are the real costs of buying a house in Melbourne?

But there’s another number you need to know.

For a $700,000 property, a buyer who isn’t eligible for first home buyer concessions could face around $38,942 in government costs on top of the purchase price.

And unlike the asking price, these costs rarely appear in the real estate ad.

What Are You Actually Paying For?

When you purchase property in Melbourne, the purchase price is only part of the equation. There are several government charges associated with transferring the property into your name and, if you’re borrowing money, registering your mortgage.

These can include:

• Land transfer duty (stamp duty)
• Transfer registration fees
• Mortgage registration fees

For a $700,000 purchase, these costs can add tens of thousands of dollars to the amount you need to have available.

Importantly, these expenses generally need to be accounted for as part of the settlement process. They’re not costs you want to discover a few days before settlement.

And That’s Not the End of It

Government charges are only one part of the additional cost of buying a home.

Depending on the property and your individual circumstances, you may also need to budget for settlement adjustments, building and pest inspections, conveyancing fees, lender fees, insurance and moving costs.

Settlement adjustments can also affect the final amount required at settlement. These may account for expenses such as council rates, water charges and owners corporation fees that have already been paid or are owing.

This is why simply calculating your deposit isn’t enough.

A buyer might comfortably have their deposit ready but still find themselves short when all the additional costs of completing the purchase are taken into account.

What About First Home Buyers in Melbourne?

There can be much better news if you’re buying your first home.

Eligible first home buyers in Melbourne may receive a full stamp duty exemption for properties valued up to $600,000.

For eligible properties valued between $600,001 and $750,000, a stamp duty concession may apply.

That can make a significant difference to the upfront cost of purchasing your first property.

However, eligibility matters. The property value, how you intend to use the property and your individual circumstances can all affect the concessions available to you.

Know Your Real Number Before You Make an Offer

One of the easiest mistakes to make when house hunting is looking at a $700,000 property and thinking:

“Can I afford $700,000?”

The better question is:

“What will buying this $700,000 property actually cost me?”

Knowing that number before you make an offer or start bidding at auction gives you a much clearer picture of what you can comfortably afford.

It can also prevent an unpleasant surprise when settlement approaches and suddenly there are thousands of dollars in additional costs that weren’t included in your original budget.

Buying Property in Melbourne? Get the Numbers Right From the Start

Every property purchase is different. Your stamp duty, registration fees, settlement adjustments and other costs will depend on the property and your individual circumstances.

If you’re planning to buy in Melbourne, Simply Settle Conveyancing can help you understand the costs associated with your purchase before settlement day arrives.

Want us to help work out what you’re likely to pay?

Get in touch with Simply Settle Conveyancing and ask us about your purchasing costs.

Knowing the real number before you sign a contract could make your property search a whole lot easier.

Figures are a general guide only and may change. This information does not constitute legal or financial advice. Government charges and eligibility for exemptions or concessions should be confirmed for your individual circumstances.