Buying a new home: It costs more than just the purchase price.

August 05, 2014
Mark Hevron

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. 

Stamp duty 

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!

 

Legal costs 

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.

 

Insurance 

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.

 

Miscellaneous Costs 

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

mark.hevron@mortgagechoice.com.au

to arrange a time to review your situation at a time and place convenient for you.

 

Legal Disclaimer

While all reasonable efforts have been made to ensure that the information contained in this Blog is accurate and up to date, changes in circumstances after the date of publication may impact upon the accuracy of the information. Nothing contained in this Blog shall be construed as conferring any licence or right under any trade mark or in relation to any copyright of Mortgage Choice Ferndale WA or any third party. Any services referred to on this Blog are only available to Australian residents and are not available to any person who is a resident of any other country. Subject to any implied terms which cannot be excluded by law, Mortgage Choice Ferndale WA and its directors, officers and employees, do not accept any liability for any loss or damage, however caused, to any person arising from the use of or reliance upon the information contained in this Blog. Mortgage Choice Ferndale WA does not accept liability for information contained in websites linked to this Blog.    

Posted in: First home buyers

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