What Fees Will I Need To Pay When Buying A Property In Queensland?
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Purchasing a property can be a very exciting time, particularly after years of saving and hunting for the perfect new home. It can also be a time full of learning and having to quickly react to directions from real estate agents, mortgage brokers and lawyers. Some of the requests may be simple and straightforward (like producing identification documents) but others may catch you by surprise (such as having to transfer funds in a short period of time). Nobody likes surprises when they involve large amounts of money, so it is wise to understand up front the types of fees you’ll need to pay when buying a property, so you can be well prepared and not caught off guard.
The biggest fee when it comes to buying property is transfer duty (also known as stamp duty). Unless you are an eligible first-home buyer and can access first-home concessions, your stamp duty is likely to be in the tens of thousands of dollars, on top of the cost of the property. This fee is payable up-front, usually as part of the settlement process.
It is easy to work out the amount of stamp duty payable simply by using a transfer duty estimator, like the one on the Queensland Revenue Office’s website.
The Queensland Titles Office also charge a title transfer fee, which is based on the purchase price. Your conveyancer will be able to give you an estimate of this will be.
Mortgage fees relate to the cost of setting up the mortgage and are usually in the realm of a few hundred dollars, but they can vary depending on the size and complexity of the loan. Typically, this fee will be payable at settlement, but you should read your mortgage documents carefully to establish the fee amount and when it is due. If you are selling another property and using the proceeds of the sale to fund the purchase of your new property, you may be discharging a previous mortgage. This means that you are paying off the old mortgage using the proceeds of the sale and opening a new mortgage related to the new property. This can sometimes attract further fees, and you should speak to your lender about how paying off your existing mortgage early can attract added costs.
Legal Fees and Searches
It is necessary for your conveyancer or lawyer to conduct searches on the property in order to legally conduct the transfer from the previous owner to you. These searches cost money; a cost which is usually paid up-front by your conveyancer or lawyer and that you will need to reimburse them for. You should expect to pay a few hundred dollars for these searches, but it may be more (or slightly less) and you should confirm the cost with your conveyancer or lawyer if you are unsure.
Building and Pest Inspections
Engaging building and pest inspectors can seem like an unnecessary cost during a purchase, but they can save you from making a mistake in the amount of hundreds of thousands, or even millions of dollars. Fees for building and pest inspections will vary, but they are essential for anyone wanting to make a sound investment on a property that is free from termites or building defects.
Most insurances are optional but depending on the amount of your deposit and other lending conditions, you may need to pay Lenders Mortgage Insurance (LMI). LMI can be a cost of tens of thousands of dollars but it can be wrapped up into the overall amount of the loan. You should check with your lender whether their LMI is payable up front or if it can be amortised over the life of the loan.