Buying a House in Queensland? Understand the Hidden Costs.

Are you planning to purchase a house in Queensland? Before you start thinking about strata sinking funds, bathroom renovations or removalist costs, be sure to plan for the following home buying expenses.

 

Stamp duty in Queensland

Most states and territories in Australia require stamp duty to be paid on the transfer or sale of real estate. In Queensland, it’s formally referred to as ‘Transfer Duty’ and it can certainly add up quickly. For example, the average Brisbane home is $552,300, and this would attract $17,878.50 in stamp duty tax. Below is a table of the current transfer duty payable in 2019.Table showing the queensland stamp duty rates for 2019

It’s not all bad though! There are various exemptions and concessions on stamp duty in Queensland. First home buyers are entitled to receive a 100% concession if the property is under $550,000 and you meet the criteria. If you already own a property or if you’re not eligible for the First home buyer concession you may be eligible for other concessions if you’re planning to live in the home.

 

Home Insurance in Queensland

In Queensland, the home purchaser is liable for the property from 5pm the next business day after the contract date. Choosing not to insure the property can carry significant risk. You’ll want to organise contents insurance as well to cover for internal fixtures and fittings.

 

Legal costs

Your legal team or conveyancer will organise the legal transfer of the property into your name. They will ensure the vendor is the true owner of the property and there are no undisclosed interests or encumbrances on the property.

 

Inspections

Building and pest inspections are a crucial part of purchasing a home in Queensland. The inspections check for structural issues, evidence of termites, and poor workmanship. The cost for this service can vary and is dependent on the number of rooms and levels in the home.

 

Agent fees in Queensland

The cost of the real estate agent is paid by the seller, so you won’t need to worry about that. However, if you’re planning to sell your existing property then you’ll need to budget for it. In Queensland, agent’s commission is not a fixed percentage. It is negotiated between the vendor and the agent when you list your house in Queensland for sale – expect to pay between 2-3% plus marketing costs.

 

Borrowing costs

Borrowing fees can include a one-off fee for your valuation, application and settlement. Ongoing fees can include an annual account fee and of course the interest payable. This is where Loan Mate can help you – we’re experts at navigating these fees and negotiating directly with the bank to waive these fees.

 

Lender’s Mortgage Insurance (LMI)

Depending on how much you plan to borrow, some banks will require you to pay for LMI. Typically, if your Loan-to-Value Ratio (LVR) is over 80% than banks will require it.

At Loan Mate, we have a number of lenders on our panel who will accept high LVR loans without requiring LMI. This can save you thousands.

If you do need to pay LMI, it’s important to understand that LMI insures the bank in case of default and not the borrower.

 

Finals Thoughts

Understanding the cost involved in any transaction is important, particularly when purchasing your new home. At Loan Mate, we explore the costs of every lender and recommend the most appropriate option to our clients. Book a meeting with us to organise pre-approval for your next purchase.