How to Determine a Home Buying Budget in Victoria

When buying a property in Victoria, it is important to learn the cost. Here is a breakdown of the expenses involved for your reference:

1. Down Payment: The typical down payment is 20% of the property price. However, this amount is not paid all at once. Usually, 10% is paid upon signing the contract, and the remaining 10% at settlement. If you can only secure a loan for 70% or less (due to borrowing capacity limitations, for example), the down payment percentage will need to be adjusted accordingly. In some cases, if you meet the eligibility criteria for government support policies, you may be able to prepare a down payment of 5%.

2. Stamp Duty: When buying a property in Victoria, you need to consider paying stamp duty. The amount of stamp duty depends on the property price and the type of purchase (residential or investment). You can use the calculator provided by the State Revenue Office of Victoria to estimate stamp duty. Stamp duty is paid at property settlement.

3. Transfer costs: Purchasing a property also involves transfer costs, including fees for transferring the property title and related legal procedures. These costs vary depending on the specific circumstances, so it's advisable to consult a professional conveyancer for an accurate estimate.

4. Valuation fees: If you're obtaining a loan for the purchase, the bank may charge valuation fees to assess the property value and loan risk. These fees typically range from a few hundred to a thousand AUD. 

5. Building and Pest Inspection Fee: Before purchasing a property, it is advisable to conduct building and pest inspections, which typically cost between $500 and $1,000 AUD. This fee is paid during the purchasing process.

6. Conveyancer's Fee: Throughout the property buying process, you will need a conveyancer to review the contract and handle the settlement procedures. The conveyancer's fee usually ranges from $800 to $2,000 AUD. Some conveyancers require partial payment upfront, while others are paid at settlement.

7. Buyer's Agent Fee: If you utilize professional buyer's agent services during the property purchase, you will need to pay their fee. Buyer's agents are professionals who represent the interests of property buyers, helping them avoid pitfalls and acquire investment-grade properties that outperform the market. If you are buying an investment property, this expense may be tax-deductible upon selling the property.

8. Adjustments for council rates, sewerage fees, etc.: All properties in Australia have council rates and sewerage fees, which are shared between the buyer and the seller at settlement. If the seller has pre-paid these fees before settlement, the buyer needs to reimburse the seller for the pre-paid amount. The specific timing of settlement may affect the amount, such as more at the beginning of the year and less towards the end.

9. Additional Costs for Overseas Buyers: If you are a foreign resident, you will need to pay FIRB (Foreign Investment Review Board) application fee, which varies based on the property price and must be applied for before purchasing the property. Additionally, you need to pay an extra 8% if you are a foreign resident, based on the property price, at the time of settlement.

In addition to the listed expenses, other costs to consider include property insurance, inspection fees, loan application fees, and more. Therefore, when buying a property in Victoria, it's recommended to consult with professionals, understand your specific circumstances, and plan your budget accordingly. 

If you encounter any challenge buying property in Australia and require professional assistance, please contact us.

We are JL Property, an independent and professional buyers agent in Melbourne.

Disclaimer: The information provided is not intended to be legal, financial, or professional advice. It is for general informational purposes only. Any reliance on the information provided is at your own risk.