Costs of buying a house in QLD

Looking to buy a house in Queensland but want to get a better idea of all the costs involved? 

If you want to drill down to the specific costs to expect when purchasing in the Sunshine State, this is the article for you. This includes detailed explanations of all the upfront and ongoing costs to factor into your budget, so you can decide what property you can afford. 

Let’s first look at all the upfront costs associated with buying a house in Queensland. 

Upfront costs of buying a house in QLD

Like other states across Australia, there are a number of upfront costs involved with buying a house in Queensland that we’ll highlight below.

Costs of stamp duty in Queensland

Transfer duty, sometimes called stamp duty, is a government tax on a property transaction when you sell, buy, or transfer property in Queensland. It’s typically the largest cost you’ll incur when buying a property, so it’s important to know how much you will owe. You can use an online stamp duty calculator for an idea how much this could be.

For a property worth $500,000, and assuming you’re not a first time buyer, you will pay transfer duty of $8,750. There is currently a concession on stamp duty for first home buyers in Queensland for homes valued under $550,000, which means you pay nothing if you meet the criteria.

Lenders Mortgage Insurance (LMI) 

If you don’t have a large enough deposit - typically 20 per cent, many lenders will require you to pay lender's mortgage insurance (LMI). This one-off lump sum is to protect them if you default, or can’t pay back the loan. 

For example, if you’re a first time buyer in Queensland with a deposit of $10,000 on a $500,000 property, you would need to pay LMI of $16,713. 

Conveyancing fees in QLD

A conveyancer is a crucial legal service when it comes to purchasing a property in Queensland. They take care of much of the paperwork, including conducting searches, arranging, negotiating, and reviewing the contract of sale, as well as overseeing the change of title. 

Expect the legal fees for buying a house in Queensland to cost anywhere from $850 to $1450, depending on the complexity of the sale. There may also be disbursements, or expenses they incur, which they will bill for separately. These can include things like conducting a title search or paying the land tax on your new property.

Building and pest inspection costs 

A building inspection is to confirm if the property you are about to purchase is structurally sound and free of any serious safety hazards. A pest or termite inspection identifies if there is any previous or current termite activity at the property. Both checks are carried out by a licensed building inspector.

You can expect a combined building and pest inspection to cost $400 - $500 in Queensland, based on a freestanding family house 

Mortgage insurance in Queensland

If you are borrowing more than 80 per cent of the value of a property, your Queensland home loan provider is likely to require you to pay lender's mortgage insurance (LMI). This fee is to offset the risk of the loan, and covers them in case you can’t make your regular mortgage payments. It’s often rolled into your regular mortgage payments rather than a lump sum.

For example, if you’re a first home buyer with a $10,000 deposit on a $500,000 property, the LMI would be $16,751 in Queensland.

Mortgage application fee

The mortgage or home loan application fee is a charge by a lender for processing your application and preparing all the documentation. Many lenders will waive it to get you to sign with them, but if they don’t, expect to pay in the region of $180 in Queensland. 

Valuation fee

Lenders will often have the property you are planning on purchasing professionally valued. This is to confirm the final loan amount. Expect a property valuation in Queensland to cost around $200, though some lenders will charge it together with your mortgage application fee. 

Registration of title

You are required to register your mortgage against the title of the property, so it can be viewed in a title search. This identifies that the property is held as security against your home loan. Since 1st August 2021, this fee is $195 in Queensland, and is typically payable to your home loan provider. 

Home and contents insurance costs

Insuring your home and your possessions covers them from accidents, theft or any number of unforeseen events like wild weather. Research from Finder found that you can expect to pay an average of $150 per month for combined building and contents insurance in Queensland, and $125 per month for building only insurance. This figure is based on a 3 bedroom, freestanding home. Note that prices for home insurance will increase if you live in northern Queensland, where cyclones are an annual occurrence.

Let’s now look at some recurring or ongoing costs to budget for, after you move in.

Understand the ongoing costs after buying a home

After all the upfront costs associated with buying a home, don’t forget there are all the ongoing bills you need to budget for. These could be due annually, quarterly, monthly, or weekly.

First up are your monthly home loan payments. You can use a mortgage repayment calculator to get an idea what these will be in advance, based on your home loan amount, mortgage term, and the interest rate you are paying. Based on a home loan of $500,000 paying an interest of 2.42 per cent over 25 years, your monthly repayments in Queensland would be approximately $2,233.

You may also need to renovate your new home, depending on its condition. This could be relatively affordable (cosmetic) or more involved, like a kitchen or bathroom makeover. Your renovations could range from a few thousand dollars for a cosmetic project, to tens of thousands for larger whole room renovations. There may also be repair and general maintenance jobs around your new property, like small paint touch ups or replacing a few roof tiles. These are likely to be no more than a few thousand dollars or less.

Next up are all your utilities, like your monthly or quarterly electricity, water, and internet services. The average Brisbane electricity bill is $1,334 per year - based on average usage in a 4 bedroom, 2 bathroom home. According to Canstar Blue research, you can expect a water rate in the region of $56 per quarter in Brisbane. They also researched internet costs around the country and found NBN internet in Queensland to be around $72 a month for a mid-tier connection. 

You should now have a better idea of all the costs involved in buying a house in Queensland, so you can budget for them all and plan your purchase accordingly.