The hidden costs of property

When it comes to hidden costs, property is at the top of the list! Whether you’re buying or selling, be sure to factor in these additional costs that may not be obvious at first.

Buying

Stamp Duty: This is the biggest expense. Stamp duty is a charge that is payable upon settlement for the transfer of property. The amount will vary between states so check with your state government revenue department for an accurate figure. Generally speaking, this is approximately 4 per cent to 5 per cent of the purchase price of the property.

Building and pest inspection: Before putting in an offer for a property or bidding at an auction, you may wish to get a building inspection. It may cost you several hundred dollars but it can well worth it, especially for older homes.

Town planner: If you plan to develop the land, seek the advice of a planner to ensure you’re able to implement the development you have in mind, as this will affect the amount you are willing to pay for it.

Selling

Agent and/or auctioneer: If you plan to use an agent/auctioneer, you will need to factor in the associated costs. An auctioneer will charge several hundred dollars and the agent’s commission can be around 2 per cent of the sale price.

Capital Gains Tax (CGT): If the property being sold is an investment property and not a primary place of residence, CGT may need to be paid. This amount will differ depending on the profit made from the sale. You should consult your accountant for advice on this matter.

Discounting rent: If the property is occupied by tenants during the sale period, you may need to discount their rent for a few weeks to compensate them for the disruption open inspections may cause.

Repairs and maintenance: Often owners will keep putting off repairs and maintenance jobs around the house for many years but if it is time to sell, it is also time to fix up the house. You should budget for these expenses and have all the jobs completed, before you put your property on the market.

Alternative accommodation: Be wary of selling if you don’t have somewhere to stay while you find a new home. Otherwise, you need to factor in the cost of renting alternative accommodation, as well as storage fees.

Buying and Selling Lawyer/conveyancer:

Buying and selling can be quite complicated so a legal professional is required. As a rule of thumb, conveyancer’s fees are several thousand dollars whereas a lawyer would generally charge more than this.

Whether you are buying or selling property, beware the hidden costs!