Avoid any unwanted surprises and get informed about how much a new home will really cost you. Here’s a breakdown of the fees you can expect and why
Purchasing a home is a major investment, so it’s essential to understand the full range of expenses involved. Beyond the price of the house and land, there are additional costs to consider — some expected, others that can catch you off guard.
Before you begin your property search, take the time to understand which of the following costs should be factored into your budget.
Stamp Duty (Land Transfer Duty)
After the purchase price, stamp duty — now officially called land transfer duty in Victoria — is often the second-largest cost when buying a home. The good news? If you’re an eligible first home buyer, you may not have to pay it at all.
Land transfer duty is a government tax applied to property purchases and is calculated based on the value of the home. The higher the property value, the more you’ll pay — and rates vary across different states and territories.
In Victoria, first home buyers can benefit from a full stamp duty exemption if the dutiable value of the property (generally the contract price) is $600,000 or less. For homes valued between $600,001 and $750,000, a concession is available, applied on a sliding scale depending on the price.
However, if you’ve previously owned property or are purchasing the home as an investment, you’ll need to factor this cost into your budget.
Example costs in Victoria (if not eligible for exemptions or concessions):
- On a $600,000 property: approx. $31,070
- On a $1 million property: approx. $55,000
To get a more accurate estimate for your situation, use a stamp duty calculator.
Conveyancing or Solicitor’s Fees
To legally transfer ownership of the property, you’ll need a conveyancer or solicitor. While it is legal to handle conveyancing yourself, the process is complex, and mistakes can be costly. Professional assistance is strongly recommended.
Fees typically range from $600 to $1,400 for a standard property purchase in Victoria.
Be sure to compare what’s included in the fee, as some providers charge extras for tasks like phone calls or document handling, while others offer a flat fee.
Lenders Mortgage Insurance (LMI)
Like stamp duty, lenders mortgage insurance (LMI) doesn’t apply to everyone. You’ll need to pay LMI if you’re buying a home with a deposit smaller than 20%. While it’s calculated as a lump sum, most lenders add this cost to your total loan so you can repay it over time in installments.
LMI protects the lender by covering any shortfall if you default on your mortgage repayments—that is, the difference between the loan amount and what the bank can recover by selling the property.
The cost of LMI depends on the size of your deposit: the smaller your deposit, the higher the insurance premium. For example, with a 5% deposit on a $600,000 home, you could pay around $25,000 in LMI. With a 15% deposit, the cost might be closer to $7,000.
Mortgage Registration & Land Transfer Fees
At settlement, your solicitor or conveyancer will handle lodging the transfer of ownership and registering the new mortgage on your property. Both of these actions incur government fees.
These costs differ depending on the state.
Loan Application or Establishment Fee
Regardless of whether you pay Lenders Mortgage Insurance (LMI), there are usually additional fees when taking out a mortgage.
Most lenders charge a one-time loan application or establishment fee when you set up your loan. This fee varies but typically falls between $500 and $1,000. It’s always a good idea to ask your lender if they offer any waivers or discounts on this charge.
Building & Pest Inspections
If you’re building a new home, you can skip this step. Our dedication to quality is reflected in the premium materials, fixtures, and workmanship we use. All Melbourne Homes contracts come with market leading Structural Guarantee, giving you peace of mind that your home is built to last.
However, building and pest inspections are highly recommended when purchasing an established home, especially older properties. These inspections identify any existing issues or potential repairs needed. Pest inspections specifically look for signs of termite damage and highlight areas that may be vulnerable to termite activity.
The cost of a combined building and pest inspection is typically around $600.
As you can see, not every cost applies in every situation, but knowing which ones relate to you will help you create an accurate budget.
At Melbourne Homes, we understand the importance of budgeting with confidence. That’s why we partner with trusted land developers to offer fixed-price house and land packages for first home buyers — no hidden fees, no surprise costs. You’ll know exactly what to budget for from the start, with no unexpected shocks down the line.
