Frequently Asked Questions

Beyond the purchase price and deposit, you’ll pay stamp duty, transfer and registration fees, conveyancing (legal fees), building and pest inspections, loan establishment fees, and potentially lenders mortgage insurance (LMI) if your deposit is under 20%. These upfront costs can add tens of thousands of dollars. Ongoing, you’ll also face council rates, building insurance, water rates, maintenance, and strata levies if buying an apartment or townhouse.

Mortgage repayments are only part of the picture. Ongoing costs include council rates ($1,300–$3,700/year depending on your council), building insurance (scales with property value), water rates ($720–$1,400/year), maintenance (typically 1% of your property’s value per year), and strata levies for apartments and townhouses. For an $800,000 house, these ongoing costs typically add around $1,000 per month on top of your mortgage.

Stamp duty is a state government tax calculated as a percentage of your property’s purchase price. Each state has its own bracket system — similar to income tax, higher price brackets attract higher rates. The amount also depends on whether you’re an owner-occupier, investor, or first home buyer. First home buyers in most states receive concessions or full exemptions below certain price thresholds.

It depends on your state and property price. Most states offer stamp duty concessions or full exemptions for first home buyers below certain thresholds. For example, NSW exempts first home buyers on properties up to $800,000, while Victoria offers concessions up to $750,000. Eligibility criteria vary — check with your state revenue office.

LMI is a one-off insurance premium required by most lenders if your deposit is less than 20% of the property value. It protects the lender (not you) if you default on the loan. The cost depends on your loan-to-value ratio — the smaller your deposit, the higher the premium. On an $800,000 property with a 10% deposit, LMI can cost around $12,000. With a 5% deposit, it can be significantly more. Some government schemes like the First Home Guarantee allow eligible buyers to avoid LMI with a smaller deposit.

Most lenders require a minimum 5% deposit, but you’ll pay LMI on anything under 20%. A 20% deposit on an $800,000 property is $160,000. With a 10% deposit ($80,000), you’d also need to budget for LMI. Remember that your deposit isn’t your only upfront cost — stamp duty, legal fees, and inspections add to the cash you need at settlement.

Strata levies (also called body corporate fees) are quarterly or monthly charges for apartments and townhouses. They cover shared building costs: common area maintenance, building insurance, lifts, pools, gardens, and a sinking fund for major repairs. Apartment levies are typically higher than townhouse levies because apartments have more shared infrastructure. Costs scale with property value and vary by state and building amenities.

Negative gearing occurs when your investment property’s costs (mortgage, rates, insurance, maintenance, management fees) exceed the rental income. The resulting loss can be deducted from your taxable income, reducing your overall tax bill. For example, if your property runs at a $20,000 annual loss and your marginal tax rate is 32%, you’d receive approximately $6,400 in tax benefits, reducing your true out-of-pocket cost.

The tax saving depends on your annual shortfall (costs minus rent) and your marginal tax rate (including Medicare levy). At a 32% marginal rate (income $45,001–$135,000), a $20,000 annual loss saves $6,400 in tax. At 39% ($135,001–$190,000), the same loss saves $7,800. The higher your income, the greater the tax benefit — which is why negative gearing is more attractive to higher-income investors.

A pre-purchase building and pest inspection is strongly recommended for all houses and townhouses. It identifies structural issues (cracks, moisture, roof damage) and timber pests (termites, borers) before you commit. Inspections typically cost $550–$900 combined. For apartments, a building inspection covers only your lot (not the building structure), so it’s less critical — but reviewing the strata report for upcoming major works is essential.

The main ongoing costs are: mortgage repayments, council rates, building insurance (houses) or strata levies (apartments/townhouses), water rates, and maintenance. For investment properties, add land tax, property management fees, and vacancy costs. The exact amount depends on your property, location, and council — use our calculator to see the breakdown for your specific situation.