Costs of buying a house in NSW (2024 edition)

Interested in purchasing real estate in New South Wales and want to know more about the associated costs?

If you're a first-time buyer, you might not be aware that budgeting involves much more than just the cost of a house. Additionally, if you haven't purchased a house in a while, you may be downsizing for retirement or upgrading into a larger home. Itemising every expense associated with owning a property will assist you in creating a budget, regardless of where you are in the process. In the end, this might assist you in determining the type of house you can afford.

To gain precise information about the costs associated with purchasing a house in NSW, refer to our guide. Even though we don't cover every single penny, you will receive a thorough breakdown of the major expenses to anticipate.

Let's start with the entire upfront cost of purchasing a home in New South Wales.

Upfront costs of buying a house in NSW

There are a number of upfront costs involved when buying a house in NSW, which we’ll highlight below.

Stamp duty costs in NSW

NSW property stamp duty, sometimes called transfer duty, is a mandatory tax that is based on the value of the property you are buying. It's important to know how much it might cost because it's the biggest expense you'll have when purchasing a home. To calculate how much stamp duty you will due, utilise an online calculator.For instance, in NSW, stamp or transfer duty is $17,707 on a $500,000 property. This goes up to $31,207 for a $800,000 property.

There are several exceptions, such as when purchasing a home "off the plan," a house and land package, or as a first-time buyer.

The First house Buyers Assistance scheme (FHBAS) offers several benefits to first-time house buyers in New South Wales. First, if the property is valued at $650,000 or less, stamp duty is not applicable. You pay a discounted sum based on a sliding scale and the property's worth if you spend between $650,000 and $800,000.

Lenders Mortgage Insurance (LMI)

In order to obtain a home loan in NSW, the majority of lenders want a 20% deposit; if not, you will be responsible for paying lender's mortgage insurance (LMI).

This is a one-time lump sum that protects the lenders in the event that you are unable to make your scheduled mortgage payments. The worth of the property and whatever savings you may have are taken into account, and the amount varies from lender to lender. In order to obtain a home loan in NSW, the majority of lenders need a 20% down payment.

For instance, you will still be required to pay $15,200 in LMI even if you are purchasing a $500,000 property and have managed to save $10,000.

Conveyancing fees NSW

The legal transfer of property from a seller to a buyer is known as conveyancing.

The cost of purchasing a home in New South Wales varies with the intricacy of the deal. Legal costs for purchasing a home might vary from $800 to $2,500 for processing all necessary paperwork and examining the sales agreement. It is important that you inquire with your legal counsel regarding the disbursement cost, which refers to the costs that they incur and bill for individually.

These may involve things like paying the land tax on your newly acquired property and performing a title search.The cost of a lawyer while purchasing a home might range from $800 to $2,500.

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Building and pest inspection costs

These two separate reports give you peace of mind that the property you’re purchasing is structurally sound and is free of any pests like termites. Building and pest inspection costs in Sydney will vary in the range of $300 - $700 (building inspection) to $200–$350 (pest inspection).

Mortgage application fee

While some house loan companies in NSW will waive this as an enticement, others impose an application fee for mortgages when you sign up. A $500 to $800 mortgage application cost is what you should anticipate.

A $500 to $800 mortgage application cost should be anticipated.

Valuation fee

Since the final loan amount is determined by the property's real worth, lenders are interested in learning about it. In New South Wales, a property appraisal should run you about $300, though some lenders may include it in your application fee.

Registration of title

The registration of the property, commonly referred to as the NSW mortgage registration fee, is mandated by the state in NSW. This notifies you that the asset is being held as collateral for your mortgage. In NSW, this has been $146 since July 2020, and it guarantees that this record may be found through a title search.

In NSW, registering a title costs $146.

Home and contents insurance costs

Your property and belongings are protected by home and contents insurance against unintentional damage, theft, and natural disasters like storms. The amount you should budget between $220 and $1,000 every year, depending on the worth of your belongings and real estate.

Buying a unit in a stratum doesn't need you to get building insurance because the strata organisation will take care of this. Now let's have a look at some expenses you might need to plan for once the purchase is finalised and you move in.

Understand the ongoing costs after buying a home

You will have a lot of continuous, recurring expenses to consider when you buy your property.

These may be due every week, every two weeks, every month, every quarter, or every year, depending on the item.

The monthly payments you make on your house loan will be a significant recurring expense. Based on your home loan amount, mortgage length, and interest rate, you may use a mortgage repayment calculator to estimate these ahead of time.

For instance, in NSW, your monthly repayments for a $500,000 home loan with a 25-year term and 2.42 percent APR would be $2,233.

It may be necessary for you to remodel or do some necessary upkeep and repairs.The property may also require renovations or some necessary upkeep and repairs, depending on its state.

While modest repairs and maintenance could cost as much as $5,000 depending on the condition of the house, major renovations involving kitchens and bathrooms can cost tens of thousands of dollars.

If you have a garden, you will need to set aside money for the maintenance of your outside spaces, especially if it has a swimming pool or requires frequent upkeep like lawn mowing.If you plan to purchase an apartment block, you should account for the substantial recurring expense of quarterly strata fees or levies.

Budgeting for quarterly strata fees or levies is essential if you're purchasing an apartment block. These include building insurance, cleaners, common area upkeep, and building maintenance. The amount of these fees varies according on the size of the complex, however in NSW, you should budget about 1.2% of the property's value, or even less if the stratum offers fewer amenities.

Your recurring expenses should also account for a variety of utilities, such as internet, water, and power charges. An ordinary Sydney household with four bedrooms and two bathrooms would pay about $1,253 in electricity bills annually. Canstar Blue's analysis indicates that the water rate in NSW is $204 per quarter, but Sydney's fixed costs are $119.77 per quarter (without a metre) or $24.30 per quarter (with a metre). Additionally, their investigation revealed that the average monthly cost of internet (NBN) in NSW was $71.You ought now have a clearer understanding of all the expenses related to purchasing a home in NSW after reading this article.

With this knowledge, you may determine what you can work out what you can afford to buy, and begin the process of planning and budgeting accordingly.