When purchasing a property, whether for private use or investment, there will generally be acquisition costs to consider in relation to the purchase.
Costs may vary with individual property acquisitions but they will generally include stamp duty, registration fees, conveyancing fees and possibly some adjustments on the sale.
Stamp Duty - Stamp duty is a levy administered individually by the various state’s in Australia. The amount of stamp duty payable usually depends on the value of the property in question. The higher the property value the higher the stamp duty.
If you purchase a property “Off the Plan”, that is before construction has begun or is complete, then you may find that the stamp duty is lower. In this instance, the stamp duty is only levied on the cost of land or, if construction has begun, stamp duty is calculated on the value attributed to the property at the time the contract has been entered into, which may only include the land and the value of construction completed..
Registration Fees – When the ownership of a property changes then the new ownership details need to be registered with the appropriate authority. Registration fees are usually a lot less than stamp duty and vary in accordance with the value of the property.
Conveyancing Fees – When you purchase a property you may choose to engage a solicitor or conveyancer to act on your behalf and attend to all legal matters pertaining to the purchase and transfer of the property. Costs involved in doing this will vary depending on whom you engage.
It is worth noting that you may be able to perform the conveyancing function yourself should you wish.
Adjustments on Sale – There may be various adjustments on sale of a property, however, in this instance we are referring to costs that the vendor, or seller, has paid in advance and must be reimbursed for.
Adjustments on sale may also relate to water rates, parks charges and body corporate if applicable.
It is worth noting that there may be other costs associated with the purchase of a property. There may be costs associated with the finance or loan that you decide to have in place to complete the purchase. These can include, mortgage insurance, registration of mortgage, application fees and legal fees.
Find out more about costs associated with property acquisition and loans
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