Buying a home in Sydney can be expensive. Even more so if you don’t know about or understand all the extra costs associated with buying a home. Once you add in mortgage fees, stamp duty, taxes, and inspections, the REAL cost of buying a home in Sydney is higher than what’s listed on your contract of sale.
This blog post will outline the major costs you’ll need to consider when buying a property in Sydney, so you can go into your purchase feeling confident that you can afford the house you buy.
Average cost to buy a property in Sydney
The value of properties within Sydney vary widely, with averages ranging from $500,000 to over $2,000,000 depending on the suburb. Prices stretch higher as you move closer to the city’s business district, and lower as you go further inland and West into the suburbs.
Cost of Property in Beverly Hills & Bexley
The current average price for a home in both Beverly Hills and Bexley is $1,200,000.
Cost of Property in Campsie & Greenacre
The neighborhoods just North of Beverly Hills, including Greenacre, Lakemba, and Campsie, are slightly more affordable, with an average price of $900,000.
Cost of Property in Oatley, Sydney
The current average price for a home in Oatley, NSW is $1.6 million.
Other Costs of Buying a House in Sydney
NSW Stamp Duty
Stamp duty is a state tax which applies to all property purchases in NSW. If you need to pay it, it will likely be the largest additional cost of buying a property in Sydney.
Generally speaking – the higher the property cost, the higher the cost of the stamp duty. To put it in perspective, the stamp duty for the average home in Beverly Hills (valued at $1.2million) would be $51,000.
You can use the NSW Revenue Office Stamp Duty Calculator to calculate stamp duty.
First Home Buyer Stamp Duty Exemption
If you’re purchasing your first home, you may be able to get out of paying the stamp duty.
The NSW Government doesn’t charge stamp duty for new home buyers who are purchasing a home under $650,000. Stamp duty on first homes that cost more than this is discounted from normal stamp duty rates.
How do I pay stamp duty in NSW?
Your mortgage broker and your lawyer will arrange to pay the stamp duty as part of the settlement process.
You don’t usually need to pay stamp duty out of your own pocket by the settlement date.
NSW Property Taxes
People need to pay property taxes on:
- Any vacant land or properties you own
- Your holiday home
- Any investment and/or rental properties you own (you might be eligible for COVID-19 relief)
- Commercial properties
- Your home – if you run a business from home
You don’t pay property tax on the house you live in
If you plan on living in your new home, you will be exempt from most of these annual property taxes.
However, if you plan on running a business out of the residence or renting the property to tenants, it may be subject to Land Tax.
Conveyancing and/or Legal Fees
In order to transfer the legal title of the property from the previous owner to you as purchaser, a lawyer or conveyancer must be consulted.
Sydney Conveyancers and Property Lawyers can cost up to $2,000. (We don’t cost nearly that much! And we offer fixed fee services)
Because this is likely one of the biggest financial decisions of your life, you want to be sure you’ve got a legal expert on your side.
Why use a licensed property lawyer?
Before you commit to buying, we will ensure the contract you’re signing is legal and fair.
Then, after you’ve signed we can guide you on the complex journey to settlement – ensuring the many i’s are dotted and the t’s crossed.
With documents to gather and moving parts to organise, we’ll manage the process on your behalf to ensure that all deadlines, requirements, and payments are met on time. And we’ll explain everything to you in language you understand.
Unlike conveyancers, property lawyers have the legal expertise to deal with any unexpected legal issues that arise during the purchase journey.
Also, you risk losing your deposit if anything goes wrong! That’s a lot of money to throw away.
That’s why it’s essential to have an experienced property lawyer on your side during the purchase of any property.
Costs for Building Inspections
We always recommend you get a building inspection prior to purchasing the home.
Building inspectors check the property for:
- potential structural problems;
- pest infestations; and
- other defects that may be costly to remedy.
Depending on the type and size of the property you are purchasing, your building inspection is likely to cost around $500.
Real Estate Agent’s Fees
If you use a real estate agent while buying your home, they will charge you either a flat fee or commission on the price of your purchase. Agents who charge a commission usually keep it to 1-2% of the purchase price, but others will charge a fee upfront as well as a partial commission.
Lifestyle & Location Costs
Beyond all these legal and services costs, you should think about the lifestyle costs for the area you live in.
Google around to work out how much nearby restaurants, gyms and schools costs, and work out how much your commute will cost you.
You need to be able to keep on top of your mortgage once you take it on, so it’s worth doing your research!
Your Property Law Experts in Sydney
Altria Law are the property lawyers you want on your side.
You’ll love our high-quality, fixed fee services. And how responsive we are. We know buying a home is a big deal to you – so we’ll do everything we can to ensure the whole process is simple, stress-free, and well explained!