The hidden costs every Australian property buyer underestimates

The headline that's not the headline

A first-time buyer's mental model usually goes: "$1M property, 20% deposit = $200K + a bit extra for stamp duty + lawyer." The actual all-in entry cost (what you must have in cash by settlement day) is closer to $250-275K for that same purchase. The gap is the cost stack most buyers don't see until they're staring at the conveyancer's settlement statement on the morning of completion.

This piece is the canonical line-by-line: what every cost is, who you pay it to, when it's due, and where buyers commonly under-budget.

Pre-purchase costs

These you pay before exchange (sometimes weeks before).

| Item | Typical cost | Notes | |---|---|---| | Pre-approval / formal approval fee | $0-600 | Some lenders + non-majors charge; majors absorb | | Building + pest inspection | $400-800 | Critical; never skip even on new builds | | Strata report (if applicable) | $250-450 | Pre-purchase strata-history check; commission via solicitor | | Independent valuation (optional) | $300-700 | Useful when offering off-market or pre-auction |

These are sunk costs (non-refundable if the deal falls through). Budget $1,500-2,500 across multiple property runs for serious buyers; expect 3-6 inspections before you transact in a competitive market.

At exchange

Within hours of contract exchange.

| Item | Typical cost | Notes | |---|---|---| | Deposit | 5-10% of purchase price | Lower at private negotiation; 10% standard at auction | | Solicitor / conveyancer initial fee | $200-500 | Some bill upfront; most invoice at settlement |

A 10% deposit on a $1M property is $100K. Most buyers fund this from savings + may use a deposit bond if cash is tied up. Bond costs ~1-1.5% of the deposit amount, so ~$1-1.5K for a $100K bond.

Settlement-day costs

What's actually due on settlement day. This is where most buyers find the surprise.

| Item | Typical cost on $1M | Notes | |---|---|---| | Stamp duty | $30-55K | Varies massively by state (see stamp duty 2026 guide) | | Mortgage registration fee | $200-300 | State Land Registry | | Title transfer fee | $200-400 | State Land Registry | | Solicitor / conveyancer settlement fee | $1,200-2,500 | Total fee including pre-settlement work | | Lender mortgage establishment fee | $0-700 | Most majors waive; non-majors charge | | Lender valuation fee | $0-400 | Bank-ordered, typically free at majors | | LMI (if LVR > 80%) | $5-30K | Significant: at 90% LVR on $1M, ~$15K | | Council rates apportionment | $300-1,500 | Pro-rata for the unused vendor period | | Water board apportionment | $50-300 | Pro-rata as above | | Body-corp/strata levies apportionment | $100-1,500 | Where applicable; varies massively | | Land tax apportionment (if applicable) | $0-2,000 | Pro-rata for unused vendor period | | Total settlement-day costs | ~$37-95K | Excluding the loan-funded property balance |

Worst case (high stamp duty state, LMI, strata): a $1M purchase can land at $90K+ of cash needed beyond the deposit just at settlement.

Post-settlement (first 90 days)

Costs you pay after the keys are in your hand.

| Item | Typical cost | Notes | |---|---|---| | Building + contents insurance | $1,500-3,500/yr | Mandatory for lender-funded purchases | | Landlord insurance (if IP) | $400-800/yr | Above standard cover | | Utility connections | $100-300 | Electricity + gas + internet + water | | Removal / moving costs | $500-3,000 | Local move; interstate $5-15K | | Immediate repairs identified at inspection | $500-10,000 | Depends on what B+P caught | | Pest treatment (preventive) | $300-600 | If recommended in B+P report | | Locksmith (re-key) | $150-400 | Often skipped; high-cost-low-effort security upgrade | | First council rates payment | Quarter share | Based on annual rate × council billing schedule | | First mortgage repayment | 30 days post-settlement | Budget by then |

Total typical post-settlement first-90-days: $3-15K for a typical homebuyer. Investment property buyers add tax-deductible items like depreciation schedule preparation ($600-900) + landlord insurance.

The all-in calculation

For a $1M owner-occupier purchase in NSW with 80% LVR, full FHBAS-eligibility:

| Category | Cost | |---|---| | Deposit (20%) | $200,000 | | Stamp duty (FHB exempt) | $0 | | Pre-purchase costs (inspections, reports) | $1,500 | | Solicitor / conveyancer total | $2,000 | | Lender + registration fees | $700 | | Apportionments (rates, water, strata if applicable) | $800 | | Insurance year 1 | $1,800 | | Utility + moving | $1,500 | | Immediate repairs reserve | $2,000 | | Total cash at settlement + first 30 days | ~$210,300 | | Total cash needed first 90 days | ~$210,800 |

Same purchase non-FHB at full stamp duty: add ~$40K stamp duty → ~$250K all-in.

Same purchase at 90% LVR (LMI + smaller deposit): deposit $100K, LMI ~$15K, stamp duty $40K, all other costs ~$10K → ~$165K all-in (lower deposit + LMI cost trade).

Where buyers consistently under-budget

1. Stamp duty. Even buyers who calculate it often skip foreign-purchaser surcharges + premium-tier brackets above $1.5M. The buying-power calculator captures all of this; trying to estimate manually is high-error. 2. Strata levies. A $1M apartment with $8K/year strata + $1.5K special-levy reserve is $9.5K/year going out from day one. Different from a freestanding home where rates + insurance might be $3K combined. 3. Insurance. Lender-mandated, non-negotiable, and rising 8-12% annually as climate-related claims grow. Old homes near coast / bushfire zones can be $5K+/year. 4. Immediate repairs. B+P reports identify 5-15 defects on most homes; the realistic 90-day rectification budget is $2-5K + a contingency. Many buyers skip this + run cash-thin in month 2. 5. Utility deposits + connections. $200-400 in security deposits to power + water + gas providers. Recoverable but tied up for 12 months.

Read further

• Stamp duty 2026 state-by-state guide
• Q&A: what are typical buying costs on a $1M property
• Q&A: what is LMI and how much does it cost
• Q&A: how much deposit do I need
• Buying power calculator. Full-stack model with all of the above.

Sources

• ASIC MoneySmart, buying a home: https://moneysmart.gov.au/property-and-renovating
• State revenue offices (per state, see stamp duty guide for links)
• ABA, banking code of practice: https://www.ausbanking.org.au/code-of-practice/
• ASIC, LMI calculator: https://moneysmart.gov.au/home-loans/mortgage-calculator