5 hidden costs of buying a property (and how to budget for them)

When you start looking for your dream home, it's easy to focus entirely on the purchase price. If you buy a house for $700,000, you just need a $70,000 deposit and a loan for the rest, right?

Not quite. Buying a property comes with several upfront costs that can catch buyers by surprise. To make sure you don't fall short at settlement, here are five hidden costs to budget for.

1. Stamp duty (transfer duty)

This is usually the largest hidden expense. Stamp duty is a state or territory government tax on property purchases, and the amount depends on the purchase price and where you buy. Some states offer exemptions or concessions for first home buyers, but if you don't qualify, stamp duty can easily add tens of thousands of dollars to your upfront costs.

2. Loan establishment and valuation fees

Many lenders charge an upfront application or establishment fee, and they will usually order a valuation to confirm the property is worth what you've agreed to pay. Some lenders waive these fees, but as a guide, budget roughly $500 to $1,000 for lender set-up charges.

3. Conveyancing and legal fees

You will need a licensed conveyancer or solicitor to handle the legal transfer of the property into your name. They review the contract of sale, conduct searches and manage settlement. Professional fees generally range from $1,000 to $2,500 depending on the complexity of the transaction, plus government registration fees.

4. Building and pest inspections

Never buy a property blind. Before contracts become unconditional, have qualified inspectors check for structural defects, dampness and termites. Spending $500 to $800 on a building and pest inspection now can protect you from problems that cost tens of thousands to fix later.

5. Lenders Mortgage Insurance (LMI)

If your deposit is less than 20% of the purchase price, lenders see the loan as higher risk and will usually require Lenders Mortgage Insurance. LMI can cost anywhere from a few thousand dollars to over $20,000. It can usually be added to your loan rather than paid out of pocket, but it's vital to factor it into your repayments. Eligible first home buyers may avoid it through the Home Guarantee Scheme, and some professionals qualify for LMI waivers.

Confused about your total purchasing budget?

Let's map it out together. Book a free assessment and we'll work through your deposit, upfront costs and borrowing capacity so you can buy with confidence.