By Boyd Johnstone and Rileigh Turlan 

In today’s day and age, buying and selling property can prove quite costly. With interest rates and inflation already putting stress on our bank accounts, it is important you are aware of ALL of the costs involved when considering selling or purchasing a property.

Read along for a breakdown of the costs you ought to know about:

The Obvious Costs

Purchase Price

This is one of the more obvious costs involved in purchasing a property. This amount is to be agreed between the Seller and Buyer and is payable at Settlement (plus or minus any adjustments that need to be made for things such as rates, rent and/or utility bills).

Initial & Balance Deposit

When entering into a contract, there will most likely be an initial deposit payable by the Buyer. This sum is determined by the Seller and can be a little as a few hundred dollars up to tens of thousands of dollars.

In some circumstances, a further balance deposit may be payable by the Buyer upon the contract becoming unconditional.

This is one of the many reasons it is important to review your contract before signing, so you can take into consideration if you are able to cover the upfront costs of both the initial and balance deposit.

Now to the often-Forgotten Costs

Outlays and Disbursements

These are the out-of-pocket expenses that are incurred as part of the conveyancing process:

Professional Fees

When selling or buying a property it is prudent to instruct a conveyancer to assist you with the transfer. Obviously, this will incur a professional fee. This fee is usually payable at Settlement or in some circumstances you will be issued an invoice after Settlement.

These fees vary for each matter; it is therefore important to ask for a quote. You can go to our website or contact us for a quote on our conveyancing fees.

Searches and Disbursements

Some searches are required for settlement adjustments (such as Council Rates Search, Water Meter Reading Search, Body Corporate Searches etc.); however, some searches are a necessary or recommended expense as part of your due diligence enquires to protect your interests.

Recommended standard searches which are applicable to most property purchases include but are not limited to Title Searches, Plan Searches, Contaminated Land Search, Land Tax Search, Building Record Search and Department of Transport Search. There are numerous other searches that you may elect to have conducted; these may be recommended to you by your solicitor and may depend on the individual property (each at their own cost).

Property Enquires

When purchasing a property, it is essential you conduct enquiries to ensure there are no unexpected issues or hidden defects. Your property enquiries may include building and pest inspections, a surveyor’s report, body corporate records search, plumbing inspections and electrical inspections to name a few. These are payable directly to the service provider and the costs will vary between each provider.

Online Settlement Fees

In Australia is it now mandatory that all property transactions (with some exceptions) are settled through the online settlement platform PEXA (Property Exchange Australia). This platform allows for faster and more efficient settlement times, as well as a more streamlined and secure process for property transactions, however it comes at an extra cost.

PEXA fees vary between $130 - $160 depending on your matter. These fees are payable at settlement and your acting conveyancer will most likely request these from you prior or add them onto your tax invoice as an outlay.

Lodgment Fees

Lodgment Fees are government fees to transfer a property from one owner to the next. They may also include fees to register a mortgage over the property or if selling, to release the mortgage over the property. These fees vary based on the purchase price and amount of lots included in the transaction. Visit this website to calculate your own lodgment fees Fee calculator - Titles Queensland or contact our office and we’d be happy to assist you in obtaining an estimate.

Transfer Duty

Transfer Duty, also known as Stamp Duty, is the tax owed to the Government when you purchase a property. Transfer Duty is assessed on a percentage of the value of the property and can cost you anywhere from a few hundred dollars to tens of thousands of dollars.

Depending on your purchasing circumstances, there are certain concessions you can claim on stamp duty such as first home concession and home concession which can reduce the fee significantly. To see if you are eligible and for more information on concession types, visit the following website https://qro.qld.gov.au/duties/transfer-duty/concessions/homes/

Once you have had a look at the available concession types and have determined if you are eligible for any, you can visit the following website https://qro.qld.gov.au/duties/transfer-duty/calculate/transfer-duty-estimator/ to calculate an estimate of your stamp duty or contact our office and we’d be happy to assist you in obtaining an estimate.

Bank fees

If you are planning on financing your purchase with a mortgage, your elected financer will have certain fees they will charge at Settlement. These fees can include the costs to set up your loan/loan application fees, additional bank charges, your bank’s PEXA fees (online settlement fees) and in some cases, your financer may charge you the cost for the valuation of the property. Please be aware that these fees may be taken from the available loan amount at Settlement and will therefore increase the amount of funds you are to provide at settlement known as shortfall. These fees vary between each institution, and it is important to ask your financer about these fees prior to going unconditional in your contract.

Take Away

In hindsight, all of the above-mentioned costs need to be taken into consideration before you enter into any conveyancing matters. Be sure to do your research, ask for the quotes, protect your interests and know what you are getting yourself into.

Our Kanther Law Conveyancing Team pride ourselves on transparency and understand the importance of being prepared financially and informatively when it comes to all conveyancing matters.

Have any questions you need answered openly and honestly? Give us a call!