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Buying Costs : Australian Real Estate

Real Estate: Australian Buying Costs

This is a reasonably complex topic because buying costs vary markedly across Australia, depending on the State or Territory in which the property is purchased, and because costs can depend on whether you are an Australian citizen, PR, temporary resident or overseas investors. Holding costs, such as land tax, can also vary similarly.

Stamp Duty - Australian Citizens and Permanent Residents

This is the largest added cost - all State Governments charge stamp duty both on the purchase price of a real estate. In the two largest markets, Sydney and Melbourne, it can generally add between 3% and 5% to the cost of an "average" home, with more expensive homes bearing an even higher burden.

To illustrate the level of stamp duty applying to Australian citizens see Table 1 below for the stamp duty payable in the five mainland states on an established home valued at $500,000, $750,000, $1M and $2M respectively, as at January, 2024. Note that concessions may be available to first home buyers, subject to conditions, buyers of new homes and that Victoria, SA and Queensland have significant additional "transfer fees".

Table 1.  Illustration: Cost of Stamp Duty 2024 - Primary Residence (AUD)

Property Value
$500K $17,805 $21,970 $8,750 $21,330 $17,765
$750K $29,055 $40,070 $19,600 $35,080 $29,741
$1M $40,305 $55,000 $30,850 $48,830 $42,616
$2M $94,875 $110,000 $88,350 $103,830 $94,116

Stamp Duty - Foreign Investors

Significant additional stamp duty surcharges apply in addition to standard stamp duty charges where the purchaser is a "foreign person", ranging from 3% to 8%, across all Australian states. Note that if you are an Australian expat and purchasing property in concert with a spouse or partner who is neither an Australian citizen or PR then these surcharges may apply to them, based on their share of the property purchase. See the summary below for more information.

Legal Fees, Including Disbursements

Your main legal cost will be for conveyancing, which is the transfer of property from one legal entity to another, unless you perhaps decide to purchase through a trust or another structure. Conveyancing fees vary across the country and you can carry out your own conveyancing, with kits available, but this is relatively rare and not recommended.

While you can take a cost range of $1,500 to $2,500 as indicative, it should not be relied upon and you should ask your solicitor or conveyancer for an estimate of their fees prior to their commencing work. We recommend that all foreign purchasers use a solicitor to ensure they meet FIRB notice and application requirements.

Lenders Mortgage Insurance (LMI)

If your mortgage constitutes more than 80% of your property valuation you may be required (by your lender) to pay for Lenders' Mortgage Insurance (LMI). It insures the lender against the existence of a "shortfall" if, after exercising its rights to sell a property after the borrower has failed to comply with the loan agreement/mortgage, there are insufficient funds to meet the borrower's commitments.

LMI does not protect you from having to pay what you owe on a mortgage and it does not pay out the loan in the event of the borrower's death or injury, nor cover loan repayments in the case of illness or unemployment, and therefore should not be confused with Life Insurance or Mortgage Protection Insurance. In other words, it protects the lender only!

The cost of LMI varies considerably depending on the lender, the purchase price and the amount of deposit you contribute. It can be a significant cost and needs to be discussed in detail with the mortgage broker/lender.


You should not exchange contracts to purchase a property until you have completed all the necessary inspections. You may be advised by your solicitor or surveyor in terms of the appropriate inspections but it will also be determined by your knowledge of the house – for example its condition, age and location.

There are a number of types of inspection:

Structural, Building or Pest Inspections – if you have concerns about the structural integrity of the house, its suitability for renovation/alteration or whether there are likely to be substantial costs involved in making it suitably habitable then you should arrange an appropriate inspection. Your solicitor or conveyancer should be able to advise you about qualified firms carrying out these activities in their State or Territory.

Surveys - your conveyancer, or legal representative, may request a survey to check the position of the houses and the position of its boundaries - to ensure that the house is correctly positioned on the land or to identify any problems with adjacent properties. It will also confirm whether the dwelling has been built in accordance with local planning requirements.

Building Insurance

The question of who is responsible for insuring the property and carries the risk of loss should something like a fire occur, varies from State to State, and you should discuss this with your solicitor. The safest approach to take is to insure the building from the time of exchange of contracts. You might in fact find that your mortgage provider will make property insurance a condition of making funds available on exchange, or certainly settlement.

Council Rates

The buyers of a property are responsible, from the time of settlement, for the payment of rates on the property. If the previous owner has made a forward payment of rates you may be required to reimburse them for any payment on a pro rata basis - this is usually taken into account in the overall settlement amount.

Body Corporate, Insurance and Sinking Fund Costs

When purchasing a property that has one or more owners, such as strata title unit, you will need to take into account a number of "running" costs involved in the maintenance and insurance of the property. These include body corporate fees, liability insurance to cover any damage that may occur to the property and a regular contribution to a sinking fund.

Land Tax - Australian States and Territories

Land tax is not strictly a buying cost, rather an operating or holding cost - but it is often overlooked by expatriates and foreign investors. The area is quite complex and some states have introduced "absentee" land tax rates which largely only impact foreign investors. We deal with stamp duty and land tax in more detail elsewhere on the website and the document available above, while focused on foreign investors, still has information valid for Australian expatriates.

FIRB Fees - Foreign Purchasers

Foreign citizens cannot normally purchase any interest
 in established (i.e. second-hand) Australian residential properties as either
 homes or investment properties and are limited to the purchase of new properties. No purchase of Australian
 property by a foreign citizen can be made without
 prior approval from the Foreign Investment Review
 Board (FIRB), and fees apply in that situation. The fees applicable depend on the value of the property being acquired and it should be appreciated that significant penalties attach to non-observance.

If you would like to arrange assistance in terms of the purchase of Australian property, please complete the Inquiry form below and we will respond promptly.

IMPORTANT: The material contained in this website and other associated communications is only intended as general, background information and must not be relied upon. No warranty is provided in relation to any material or to the services that may be contracted through It is recommended that individuals seek the advice of qualified professionals before taking any action.