Resources > Investing > The upfront costs of buying a property

The upfront costs of buying a property

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For most of us, buying a property will involve the largest amount of money we’ll ever be handing over to a complete stranger. So before you do, ensure you’re prepared for the costs ahead.

After securing the property, you’ll need to provide a deposit. It’s the one of the biggest initial outlays you’ll make, hopefully with 20% of the purchase price. It can be less, but more costs will be added to your mortgage.

You should also have extra money saved for other upfront costs such as:

Stamp dutyIt’s a tax applied to property (in this case) and must be paid by the purchaser, ie you. It varies by state and territory so we’ve provided links to government websites you can use to calculate the amount (see Useful links & resources below)
Pest & building inspectionsThese optional costs can add up depending on how many properties you are interested in
Conduct a strata searchYou’d do this if you’re buying an apartment to understand what’s involved with being part of the community and what costs you’ll have to pay
Solicitor / conveyancer feesIt’s worth paying an experienced professional to complete all the necessary checks and excessive paperwork involved in acquiring property
Loan application feeThis goes by other names like ‘up-front’, ‘start-up’ or ‘set-up’ fee. This is a once off establishment fee charged by the lender to create your loan. If you aren’t changed this fee, you may be hit with higher ongoing fees so check the details
Lenders Mortgage Insurance (LMI)You have to pay this if you don’t have more than 20% of your deposit saved. It’s a type of insurance that your lender takes out to protect themselves in case you can’t repay the loan


All these costs can take up to 5% of the property price, sometimes more depending on what else you need like home and contents insurance for example.

So if you only save a deposit of 5% for the purchase price of your property, the entire deposit has just been spent on costs. That’s why more is best – like 25% of a deposit. That gives you 5% for the additional upfront costs and 20% for the deposit so you can avoid paying for things like lenders mortgage insurance.

If you’re a property investor the upfront costs can go all the way up to 10% because you don’t get things like a concession on stamp duty or the first home buyers grant from the government. So keep that in mind when you’re working out what costs you need to save for.

If you’re having trouble getting started you should review your budget and set yourself a savings goal to help save towards your deposit. If you’ve done this but are still struggling to get a foot in the door of your first property, consider alternatives like widening your property search.

Good luck!

Useful links & resources: Stamp duty calculators

One of the bigger upfront costs you may have to pay is stamp duty. Select the relevant link to find out how much you will need to pay:

ACT - Revenue Office: Conveyance duty calculator

NSW - Office of State Revenue: Calculator - for land and property transfers

NT - Department of Treasury and Finance: Stamp duty calculators

QLD - Office of State Revenue: Transfer duty calculator

SA - RevenueSA calculator: Stamp duty on conveyances

TAS - Department of Treasury and Finance: Property transfer duty calculator

VIC - State Revenue Office: Our calculators

WA - Department of Treasury and Finance: Calculators

TAS - Department of Treasury and Finance: Property transfer duty calculator

VIC - State Revenue Office: Our calculators

WA - Department of Treasury and Finance: Calculators

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