The True Cost of Buying a House in Australia
The real cost of buying a house in Australia — stamp duty, LMI, conveyancing, inspections and settlement adjustments, with a worked sticker-vs-door example.
The listing says $700,000, but by the time you're holding keys the real number is closer to $740,000 — and almost nobody warns you until the bills start arriving.
Call the listing price the sticker price and the all-in total the door price — what it genuinely costs to walk through your own front door. Here's everything that lives in the gap between them.
Stamp duty: the boss-level extra
Stamp duty — the state tax charged whenever property changes hands — is almost always the biggest extra by a mile. On a typical capital-city home it commonly runs into the tens of thousands, and every state and territory sets its own rates, so the same house costs different amounts to buy depending on the state.
Two things make it hurt. It's usually due at or around settlement — the day the money moves and you get the keys — and most lenders won't let you fold it into your home loan. It comes out of your savings, on top of your deposit.
First home buyer? Every state offers some kind of stamp duty relief, and it can be worth tens of thousands. Check your state revenue office's calculator before you set your budget — not after.
LMI: the insurance that isn't for you
Put down less than a 20% deposit and most lenders charge you lenders mortgage insurance, or LMI — an insurance policy that protects the bank if you stop paying. You pay the premium; the bank gets the protection.
On a modest deposit, LMI typically lands somewhere between $10,000 and $30,000 or more — the smaller your deposit, the steeper it gets. A 5% deposit on a $600,000 place can attract a premium around the $30,000 mark.
Unlike stamp duty, LMI can often be added to your loan — which feels painless and means you pay interest on it for thirty years. Some government schemes let eligible first home buyers skip LMI with a small deposit, so check what you qualify for first.
🛡️The plot twist
LMI protects the lender, not you. If things go wrong, the insurer can still chase you for the money. You're buying the bank a safety net and paying five figures for the privilege.
The professional parade
Then come the people who make the purchase legally happen — smaller bills, but they arrive in a group.
- Conveyancing — the legal work of transferring ownership — typically around $800 to $2,500 in professional fees, plus a few hundred dollars in searches and government charges
- Building and pest inspection — typically around $400 to $800 combined for a standard home
- Loan costs — application or settlement fees, and government mortgage registration fees, often a few hundred to over a thousand dollars all up
- Moving — anywhere from a carton of beer for strong friends to a couple of thousand for professional removalists
The sneaky one: rate adjustments at settlement
Sellers usually pay council rates, water charges and strata levies in advance. If they've paid for the whole quarter and you take the keys halfway through it, you reimburse them for your share at settlement.
It's fair — you're living there for that half — but it appears on your settlement statement as a surprise line item, typically a few hundred to a couple of thousand dollars, right when your bank account is at its lowest.
Your conveyancer calculates it to the day. You just need to know it's coming.
The worked example: watch $700,000 grow
Let's put a made-up buyer through the machine. Sam buys a $700,000 house with a 10% deposit, not a first home buyer, in a mid-range stamp duty state. Roughly:
- Sticker price: $700,000
- Stamp duty: around $27,000 (varies enormously by state)
- LMI on a 10% deposit: around $13,000
- Conveyancing plus searches: around $2,000
- Building and pest inspection: around $600
- Loan and registration fees: around $1,000
- Rate adjustments at settlement: around $900
- Removalists: around $1,500
- Door price: roughly $746,000
🧮The rule of thumb
Budget an extra 5 to 7 percent on top of the purchase price for buying costs — more with a small deposit, less if first home buyer concessions apply. Then set your maximum offer from what's left, not the other way around.
FAQ
What's the single biggest hidden cost when buying a house?
Stamp duty, almost always — the state tax on transferring property. It commonly runs into the tens of thousands on a typical home, usually can't be added to your loan, and varies by state. LMI is the runner-up if your deposit is under 20%.
Can I borrow the extra costs as part of my home loan?
Mostly no. Stamp duty, conveyancing, inspections and adjustments generally come from your own savings at or before settlement. LMI is the exception — lenders often let you add the premium to the loan, though you'll then pay interest on it for the life of the loan.
How much should I set aside on top of my deposit?
A common rule of thumb is 5 to 7 percent of the purchase price for all the extras, with stamp duty doing most of the damage. First home buyers with duty concessions can land well under that; small-deposit buyers paying LMI can land over it. Run your state's numbers before you set a budget.
Run your own numbers
Sources: figures checked against ATO published rates and thresholds for FY2025-26 at the review date. See how we check our numbers.
⚠️ General information only — not tax or financial advice. Figures relate to FY2025-26 unless stated otherwise.