Buying a home is probably the biggest financial commitment you’ll make in your lifetime, so it’s a smart move to be aware of as many of the associated costs as possible right from the start.
This is a tax levied on the purchase value of a property, and the amount varies from state to state. It is also sometimes referred to as “transfer duty”.
In Western Australia, there are stamp duty concessions available for first home buyers. The First Home Owner Rate of Duty applies to a dutiable transaction with a dutiable value of up to $600,000 for a house and land, or $400,000 for vacant land.
FHO Concession rates - if the property includes a home:
Dutiable Value Rate of Duty
$0 - $500,000 Nil
$500,000 - $600,000 $22.51 per $100 or part of $100 above $500,000
For vacant land
Dutiable Value Rate of Duty
$0 - $300,000 Nil
$300,000 - $400,000 $13.01 per $100 or part of $100 above $300,000
For other property purchasers, including investors, there is a stamp duty calculator available on the Mortgage Choice web site.
As an example, the amount of duty payable on a property purchased for $500,000 (house and land) by someone ineligible for the first home buyer’s concession, the duty will be $17,765 (plus other government fees of a transfer fee of $250 and a mortgage registration fee of $160).
Building and pest inspections
Even though the cost of these inspections can be over $500, this is nothing in comparison to major building works post-purchase. A severe termite infestation can render a house inhabitable within a matter of months. Better to be safe than sorry!
Real estate agent fees
If you are selling a property to enable you to purchase anew, unless you sell your property privately you will have to pay commission to real estate agents, which varies from agent to agent. It pays to shop around!
You need to ensure the seller of your new property is legally entitled to do so, and you’ll also need a settlement agent, also known as a conveyancer to legally transfer ownership of the property. It is possible for you to undertake this yourself. However, if you choose to use a settlement agent, shop around and set aside around a $1000.
Individuals generally fall into two camps when it comes to insurance – the embracers and the avoiders. If you take out a loan to purchase your property, your lender will require a copy of your home insurance policy at settlement. With such a large financial commitment, you may want to think about other insurance such as contents insurance, mortgage protection insurance and life insurance. After all, who will make your loan repayments if you cannot?
Your local Mortgage Choice Broker can assist you with all your insurance queries, when you meet to discuss your loan requirements.
Other costs that need to be taken into account are your relocation or moving costs and council rates and utilities (electricity, gas and water) connection fees.
As your Mortgage Choice broker, I can assist you with any queries or questions that you may have in relation to the foregoing.
Telephone or email me now
Mark Hevron 0418 915 920
to arrange a time to review your situation at a time and place convenient for you.
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