Edited: 15th April 2026
TL;DR
- The true upfront cash requirement is your deposit plus stamp duty, conveyancing, inspections, registration fees, and a move-in buffer — for a $700,000 purchase with a 10% deposit in NSW, that total is closer to $105,000–$115,000, not $70,000.
- Stamp duty is typically the largest single cost outside the deposit and cannot be rolled into your home loan — first-home buyer concessions can reduce or eliminate it, but thresholds vary by state and change periodically.
- For buyers with less than 20% deposit, LMI can rival stamp duty in total cost — unless you qualify for the First Home Guarantee, which removes that cost entirely for eligible buyers.
- Auction purchases require all due diligence to be completed before bidding — you may incur inspection and legal costs on properties you do not win, so budget for that possibility if you are actively competing at multiple auctions.
Most buyers spend months saving for a deposit and getting their finances in order — then walk into the purchase process and discover there’s a second layer of costs they hadn’t fully accounted for. Not small costs, either. Depending on the property, the state, and how the purchase is structured, the expenses beyond your deposit can run anywhere from $15,000 to $50,000 or more.
This isn’t a scare tactic. It’s just the reality of property transactions in Australia, and the buyers who handle it best are the ones who mapped out the full picture before they started making offers.
The goal of this article is to give you that full picture — broken down by when each cost hits, which ones vary by your situation, and where buyers commonly come unstuck.
If you’re still working out where you stand before doing these calculations, it helps to understand your loan options first. First-home buyers may have access to first-home buyer loan options that reduce the stamp duty component significantly, while buyers with a smaller deposit should look into whether they qualify for LMI waived loans, which can save tens of thousands in insurance costs that would otherwise sit on top of everything else covered below.
Why “Deposit Plus Repayments” Is the Wrong Way to Budget
The deposit-and-mortgage mental model is intuitive but incomplete. It gets buyers thinking about the ongoing cost of ownership without accounting for the one-time cost of getting there.
Between the moment you sign a contract and the moment you get the keys, there are government charges, legal fees, lender fees, and due diligence costs that need to be paid — most of them before or at settlement. Then there are the first-90-days costs: the things you discover once you’re inside the property, the immediate compliance requirements, the utility connections, the appliances that need replacing.
None of that appears in a mortgage repayment calculation. And for buyers stretching to meet a deposit threshold, these costs can be the difference between a smooth purchase and a genuinely stressful one.
For many first-home buyers, one of the biggest hurdles is bridging the gap between their savings and the upfront costs outlined above. Government initiatives can play a meaningful role here — for example, the First Home Guarantee Scheme allows eligible buyers to enter the market with a smaller deposit while avoiding LMI, which can significantly reduce the initial cash pressure. Understanding how these schemes fit into your broader cost structure can make a substantial difference when planning your purchase.
The Four Buckets Every Buyer Should Plan For
Rather than throwing a list of costs at you, it’s more useful to think in stages. Every purchase involves roughly four buckets of expense, and knowing when each one hits helps you plan cash flow, not just total spend.
Bucket 1: Government charges — stamp duty (or transfer duty), mortgage registration fees, and title transfer costs. These are unavoidable, state-dependent, and often the largest single line item outside the deposit itself.
Bucket 2: Transaction and finance costs — conveyancing, legal review, lender fees, and valuation. These are the costs of completing the transaction.
Bucket 3: Due diligence — building and pest inspections, strata reports, contract review, title searches. These are what you pay to understand the risk before committing.
Bucket 4: Move-in and early ownership costs — insurance, council rates, utility connections, immediate repairs, and compliance fixes. These start the moment you own the property.
Each bucket is discussed below. The amounts vary, but none of them should be a surprise.
Costs Before You Even Make an Offer
Contract Review and Legal Advice
In most states, you can — and should — have a solicitor or conveyancer review the contract before you sign. This isn’t a formality. Contracts can include special conditions, easements, zoning restrictions, or clauses that affect what you can do with the property.
A contract review typically costs between $200 and $500. It’s one of the better-value items on this list.
Building and Pest Inspections
A building inspection checks for structural issues, water damage, drainage problems, and safety concerns. A pest inspection looks for termites and other timber pests. You can get them done separately or as a combined report; combined inspections generally run from $400 to $700, depending on the property size and location.
Some buyers try to skip these to save money or to move faster in a competitive market. That’s a false economy. A structural issue or active termite infestation can cost tens of thousands of dollars to fix — often far more than the purchase price adjustment you might negotiate. If a seller won’t allow an inspection, that’s a signal worth taking seriously.
For established properties, especially, inspections should be treated as non-negotiable.
Strata Reports (Apartments and Townhouses)
If you’re buying into a strata scheme — a unit, apartment, or townhouse — the strata report is the equivalent of the building inspection. It tells you the financial health of the owners’ corporation, the outstanding maintenance, the sinking fund balance, any current or pending special levies, and the history of disputes.
Strata reports typically cost $200 to $400. What they can reveal is significantly more important than their price. A building with a depleted sinking fund and deferred maintenance is going to cost every owner, and a special levy of $5,000 or $10,000 per lot is not uncommon in older buildings with major works pending.
This is one of the most underappreciated risks for apartment buyers. The purchase price looks fine; then a special levy lands three months after settlement.
Pre-Auction Due Diligence
If you’re buying at auction, your due diligence needs to happen before the auction — not after. Once the hammer falls, the contract is unconditional. There’s no cooling-off period, no subject-to-finance clause, and no opportunity to renegotiate based on what an inspection reveals.
That means inspection costs, legal fees, and strata report costs may be incurred on properties you don’t end up buying. Budget accordingly if you’re actively bidding at multiple auctions.
Costs Between Signing and Settlement
Stamp Duty (Transfer Duty)
This is the big one. Stamp duty is a state government tax on property transfers, and it’s calculated as a percentage of the purchase price. The rates vary significantly by state, and the amounts at play on a typical purchase are substantial.
To give a rough sense: on a $750,000 property, stamp duty ranges from approximately $15,000 in some states to over $30,000 in others. Victoria and New South Wales have historically been among the higher-rate states for non-first-home buyers.
First-home buyers have access to concessions or exemptions in every state and territory, though the thresholds and conditions differ. In some states, a first-home buyer purchasing under a certain price point pays no stamp duty at all. In others, they receive a partial discount. These concessions change periodically, so the current figures are worth checking directly with your relevant State Revenue Office rather than relying on figures from an article written 12 or 18 months ago.
The practical point: Stamp duty is usually due at or before settlement, and it can’t be rolled into your home loan with most standard products. You need that cash available.
Conveyancing and Legal Fees
Conveyancing is the legal process of transferring property ownership. You’ll need a solicitor or licensed conveyancer to handle this, and their fees typically range from $1,500 to $3,000 for a standard residential purchase. More complex transactions — older properties, rural land, properties with easements or caveats — can sit higher.
This fee covers preparation and review of transfer documents, liaising with the other party’s solicitor, handling settlement adjustments, and lodging the transfer with the relevant titles authority.
Mortgage Registration and Title Transfer Fees
In addition to conveyancing fees, state governments charge a fee to register your mortgage and transfer the title into your name. These are smaller line items — often a few hundred to a few thousand dollars, depending on the state and loan amount — but they’re real costs that occasionally catch buyers off guard.
Lender Fees
Your lender may charge an application fee or loan establishment fee, typically $300 to $600. Some lenders waive these, particularly for certain loan products or as part of a competitive offer, but not all.
If you’re taking out a loan package with features like an offset account, there’s often an annual package fee of around $300 to $400 per year. This is ongoing, not a one-off — worth factoring into the true cost of your loan over time.
Lender Valuation
Before approving your loan, your lender will commission a valuation to confirm the property is worth what you’re paying. In many cases, this is covered by the lender. However, if the property is unusual, rural, or the lender’s initial valuation tool doesn’t return a confident figure, a full valuation may be required at your cost — typically $300 to $600.
More critically, if the valuation comes in below the purchase price, the lender will only lend against the lower figure. That gap — called a valuation shortfall — needs to be covered by cash. If you were counting on a particular loan-to-value ratio, a shortfall can require you to find additional funds at short notice. This catches people out more often than you’d expect in competitive markets.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the purchase price, your lender will almost certainly require you to pay Lenders Mortgage Insurance. This insures the lender — not you — against the risk of default.
LMI can be significant. On a $700,000 property with a 10% deposit, LMI could cost anywhere from $8,000 to $15,000, depending on the lender and the exact LVR. It can usually be capitalised into the loan (added to the loan balance rather than paid upfront), but doing so means you’re paying interest on it for the life of the loan, which increases the real cost further.
This is one of the costs that first-home buyer schemes are specifically designed to address. The federal government’s Home Guarantee Scheme allows eligible buyers to purchase with a 5% deposit without paying LMI, because the government guarantees the remaining portion. Places are limited, and conditions apply, but for eligible buyers, it can represent a meaningful saving.
Settlement Adjustments
At settlement, costs associated with the property are adjusted between buyer and seller based on the settlement date. If the seller has prepaid council rates for the quarter, you’ll reimburse them for your share. If there are water usage charges outstanding, those are adjusted the other way.
Settlement adjustments are typically a few hundred dollars in either direction, but in the week before settlement, you’ll receive a settlement statement showing the final adjusted figure. First-time buyers sometimes don’t realise that the purchase price and the settlement figure aren’t exactly the same number.
Costs That Begin the Day You Own the Property
Home and Contents Insurance
Most lenders require you to have building insurance in place from the date of exchange (when contracts are signed), not just from settlement. This is a detail that slips through for some buyers, particularly those who assume insurance starts when they move in.
Building insurance on a typical home might cost $1,500 to $3,000 per year, depending on location, build type, and insurer. Properties in flood zones, cyclone-prone areas, or high-bushfire-risk locations attract significantly higher premiums — in some cases, much higher than buyers expect when they’ve been comparing national average figures.
Before you make an offer on a property, it’s worth obtaining an indicative insurance quote. If the premiums are unusually high, that’s financially relevant information.
Council Rates and Water Rates
These begin accruing from the day you own the property. Council rates vary considerably by local government area — anywhere from $1,000 to $4,000+ per year is common, depending on property type and location. Water rates follow a similar pattern.
For an apartment, you’ll also pay strata levies (quarterly, typically), which cover building insurance, common area maintenance, building management, and contributions to the sinking fund. These can range from $1,000 per quarter for a modest block to $4,000+ for a complex with lifts, a pool, a gym, and concierge.
Immediate Repairs and Compliance
No property is perfect the day you move in, and even properties that passed their building inspection will have items that need attention. Budget at least a few thousand dollars for the first 90 days — more for older properties or homes that have been tenanted.
Compliance costs often catch buyers off guard. Depending on the state and property type, you may be required to bring smoke alarms, pool fencing, and electrical safety switches up to current standards before or shortly after purchase. These aren’t optional, and they’re at your cost.
Moving, Storage, and Establishment
Moving costs depend heavily on distance and volume, but can range from $1,000 for a local move with a small load to $5,000 or more for an interstate or a family home. If there’s a gap between your current lease ending and settlement, temporary storage and accommodation add to that.
Appliances, blinds, and furnishings don’t always come with the property. An empty kitchen or bare windows on day one can add up quickly if you haven’t budgeted for them.
How the Numbers Change Based on Your Situation
First-Home Buyers
Concessions and schemes can meaningfully reduce the government charge component — stamp duty exemptions and the Home Guarantee Scheme being the most impactful. However, first-home buyers with smaller deposits still face LMI (unless using a guarantee scheme), and still need cash for conveyancing, inspections, and the move-in costs. The upfront cash requirement is lower than for repeat buyers in some states, but it’s still substantial.
Investors
Investors don’t qualify for first-home buyer concessions and typically face full stamp duty. They also need to budget for property management setup costs, landlord insurance, and potentially initial repairs to bring the property to a lettable standard. Land tax implications (which vary by state and portfolio size) are a separate ongoing consideration.
Apartment vs House
Apartments have lower (or no) building inspection costs, but add strata report costs and ongoing strata levies. The risk of a special levy is a real one in older buildings, and it’s worth asking about the sinking fund balance before you buy. Houses skip strata fees but take on full responsibility for maintenance, repairs, and building insurance independently.
Auction vs Private Treaty
As noted earlier, auction purchases require all due diligence to be completed pre-auction. That means you may incur inspection and legal costs on properties you don’t win. Build this into your budget if you’re auction shopping.
A Simple Budgeting Formula
A practical approach for most buyers:
Take your purchase price. Add your expected stamp duty (check the current rate with your state revenue office). Add $3,000 to $5,000 for conveyancing, legal review, registration fees, and inspections. Add LMI if your deposit is under 20%. Add a move-in buffer of $5,000 to $10,000 for first-90-day costs. That total deposit includes the cash you actually need.
For a buyer purchasing a $700,000 property with a 10% deposit in New South Wales:
The deposit is $70,000. Stamp duty (as a non-first-home buyer) is approximately $26,000. Conveyancing and legal costs add around $3,000. Inspections and due diligence add $1,000. LMI might be $10,000 to $14,000 (capitalised into the loan, but real). Move-in buffer of $5,000. That’s a cash requirement of around $105,000 to $115,000 — not $70,000.
That gap is why it’s worth running these numbers before you start offering.
Where Buyers Most Commonly Come Unstuck
Skipping building or pest inspections to move faster in a hot market. The savings are $500. The potential cost is $30,000 in remediation.
Underestimating strata costs for apartments — not just the quarterly levies, but the latent risk of a special levy in a building with deferred maintenance.
Relying on stamp duty figures from an article or a calculator that uses outdated rates or thresholds. State governments adjust these periodically. Always verify with the relevant revenue office.
Forgetting settlement adjustments. The amount is rarely large, but it needs to be available at settlement.
Not getting insurance in place from the exchange. If the property suffers damage between exchange and settlement, being uninsured is a problem.
Underestimating the first-90-day costs. Even a structurally sound property will have something that needs doing.
The Bottom Line
The true cost of buying a home in Australia is the purchase price plus government charges plus transaction costs plus due diligence plus the buffer for what you discover in the first few months of ownership. For most buyers, that means having meaningfully more cash available than the deposit figure suggests.
None of these costs is unreasonable or surprising once you know they exist. The buyers who handle the process most smoothly are simply the ones who mapped them out early — before they were emotionally committed to a specific property or stretched thin trying to make a deal work.
If you want to run through the real numbers for a purchase you’re considering, speak to a mortgage broker before you start making offers. Understanding your full cash requirement and your borrowing position together gives you a much clearer picture of what you can actually afford.
Frequently Asked Questions
How much extra should I budget on top of my deposit when buying a home in Australia? As a rough rule, budget an additional 4% to 7% of the purchase price on top of your deposit to cover stamp duty, conveyancing, inspections, registration fees, and move-in costs. The exact figure depends on the state, your buyer type, and the property. First-home buyers in some states can significantly reduce the stamp duty component through concessions.
What is the biggest hidden cost when buying a house? For most buyers, stamp duty is the highest single cost outside the deposit — it can reach $25,000 to $40,000 on a typical metro purchase, depending on the state and price point. For buyers with less than a 20% deposit, LMI can rival or exceed stamp duty in total cost.
What is LMI, and do I have to pay it? Lender’s Mortgage Insurance is charged by lenders when your deposit is below 20% of the property value. It protects the lender against default — not you. The cost varies by lender, loan size, and LVR, but can run into the tens of thousands of dollars. It can usually be added to your loan balance rather than paid up front, though that increases your total debt. First-home buyers who qualify for the federal Home Guarantee Scheme can avoid LMI entirely with as little as a 5% deposit.
What are settlement adjustments? Settlement adjustments are the pro-rata division of property costs between buyer and seller at settlement. Council rates, water rates, and strata levies prepaid by the seller are reimbursed by the buyer for the buyer’s portion. You’ll receive a final settlement statement showing the adjusted amount, which may be slightly higher or lower than the contract price.
Are building and pest inspections worth the cost? Yes, almost always. The inspection cost is typically $400 to $700. The potential cost of discovering a major structural issue or active termite infestation after you’ve settled is far higher — frequently $20,000 to $50,000 or more. Inspections are particularly important for established properties, older homes, and properties that have been vacant or tenanted.
What extra costs apply when buying an apartment? Apartments add strata report costs (to assess the financial health and maintenance status of the building) and ongoing strata levies (quarterly fees for common area maintenance, building insurance, and sinking fund contributions). The risk of a special levy — a one-off charge for major building works — is real in older buildings with low sinking fund balances. Check the strata financials carefully before purchasing.
Do stamp duty concessions for first-home buyers cover all of the upfront costs? No. Concessions or exemptions reduce or eliminate stamp duty, which is significant. But conveyancing, inspections, registration fees, and move-in costs still apply. Buyers with deposits under 20% still face LMI unless using a guarantee scheme. The concessions help materially, but first-home buyers still need a meaningful cash buffer beyond their deposit.
What costs do I face if I’m buying at auction? At auction, the contract is unconditional from the moment the hammer falls. That means all due diligence — building inspection, strata report, legal review — must be completed before auction day. You may incur these costs on properties you don’t win. Budget for this possibility if you’re actively bidding at multiple auctions.
How do home-buying costs differ between states? Stamp duty is the main variable. The rates, thresholds, and first-home buyer concessions differ across NSW, VIC, QLD, WA, SA, and the territories — sometimes substantially. Registration fees also vary by state. For current figures, check directly with your state’s revenue office rather than relying on third-party calculators that may not be updated.
How big should my financial buffer be after settlement? A minimum of $5,000 to $10,000 in accessible savings after settlement is a reasonable baseline — more for older properties or houses requiring maintenance. This covers immediate compliance costs, minor repairs, utility connections, and the inevitable surprises of the first few months. Running out of accessible cash at settlement is a stressful position to be in and one that’s avoidable with early planning.