Buying a house is one of life’s biggest milestones and deserves to be celebrated. But while most budget for a deposit and mortgage repayments, many people are caught off guard by the extra expenses along the way that tend to pop up. Understanding the full costs of buying a house means you can plan with confidence and avoid unwanted surprises.

This guide breaks down the complete list of hidden costs of buying a house so you can stay financially prepared at every step.

The big picture: expenses in buying a house

When you’re planning your purchase, it’s important to look beyond the headline price. The expenses in buying a house can include everything from legal fees and stamp duty to cleaning, insurance, and moving costs. Some are upfront, while others appear later. Let’s take a closer look at the key costs to consider.

Upfront & Government Costs

Property Deposit

Your deposit is the biggest upfront cost when buying a home. Aim for 20% of the purchase price to avoid paying Lenders Mortgage Insurance (LMI). Saving a higher deposit not only reduces your loan amount but also gives you access to better interest rates and terms.

Lenders Mortgage Insurance (LMI)

If your deposit is under 20%, your lender may require LMI, a fee that protects them (not you) if you default on your loan. This can cost thousands of dollars depending on the loan size and deposit ratio, so it’s worth factoring in early.

The cost is not a fixed amount, it depends on factors like the property value, how much you borrow, your deposit size (LVR), the lender and insurer. 

Here are some typical guidelines: LMI is commonly in the range of about 1% to 5% of the loan amount. For example: if you’re buying a $500,000 property with only a 10% deposit (i.e., LVR ≈ 90%), your LMI could be $10,000 or more. 

Stamp Duty

Stamp duty is one of the largest extra costs of buying a home, as a rule of thumb it’s 3-4% of the property value. It’s a state government tax that varies depending on:

• The property’s value
• The state or territory you’re buying in
• Whether you’re a first-home buyer (as concessions may apply)

Use an online calculator to estimate this cost. Some states offer stamp duty exemptions or discounts for first-home buyers, so check what you’re eligible for. 

Legal and Conveyancing Fees

Property contracts and settlements must be handled correctly to avoid costly mistakes. Hiring a qualified conveyancer or property lawyer is essential. With Bark, you can easily connect with trusted professionals who specialise in real estate transactions. 

A property lawyer is crucial when buying a property, they handle all legal aspects of property transactions, which includes tasks like drafting and reviewing contracts, conducting due diligence, managing leases, and advising on zoning regulations. Property lawyers guide you through the process, from the exchange of contracts to the final settlement, which is often referred to as conveyancing.

Expect to budget several thousand dollars for:

• Contract review and preparation
• Managing the settlement process
• Lodging and handling government paperwork

Legal and conveyancing fees in Australia typically range from approximately A$800 to A$2,500 for standard residential property transactions.

Building and Pest Inspections

Before signing the dotted line, always book building and pest inspections. These pre-purchase checks can reveal hidden issues such as termites, damp, or structural defects, and can save you from potential expensive repairs later. 

Building inspectors:

• Look for major defects in the foundation, framing, walls, and roof structure. 
• Inspect the roof, gutters, retaining walls, and drainage for any issues. 
• Check the walls, floors, and wet areas (bathrooms, kitchens) for issues like cracks, leaks, and signs of dampness or mold. 
• Inspects the subfloor, fences, sheds, and accessible plumbing and electrical components. 

Pest inspector:

• Search for evidence of termites, borers, and other pests that can cause significant damage. 
• Look for conditions that attract pests, such as moisture or rotting wood. 
• Report on any existing damage caused by pests and assess the potential threat. 

For a combined building & pest inspection, you’re typically looking at somewhere around A$400 to A$900 for a standard-sized house.

Loan & Bank Fees

Lenders often charge various setup and processing fees, including:

• Loan application fees
• Valuation fees
• Settlement and discharge fees

You’ll need to budget for several loan and bank fees on top of the purchase price. Lenders usually charge an application or establishment fee (around A$150–A$700) to set up your home loan, and a valuation fee (about A$100–A$300) to assess the property’s worth. 

Altogether, these upfront costs (along with your stamp tax) can add roughly 7–11% of the property’s price. To avoid surprises, always ask your lender for a full fee breakdown and compare loans using the “comparison rate,” which reflects both interest and fees. 

Moving & Connection Fees

The excitement of moving in can fade when the bills start to roll in. Budget for:

• Removalists and movers to transport your belongings
• Utility connection fees for electricity, gas, and internet
• Cleaning costs for both your new and old property

When you hire professionals to move your household goods, expect costs for local moves (within the same city/region) of about A$300 to A$3,500 depending on the size of your home, amount of furniture and how far you’re moving. For example, a 3-bedroom house move might cost around A$1,000–A$1,500 in many cases. 

For utility connection/disconnection (electricity, gas, etc), the fees tend to be relatively modest for standard situations. Many connection/disconnection fees are in the range of A$10 to A$130 for electricity, and similar or lower for gas, depending on state and provider.

Ongoing & Hidden Costs

Even after settlement, the hidden costs of buying a house and owning a home continue. To avoid financial strain, build these recurring expenses into your long-term budget.

Council Rates

Homeowners are responsible for ongoing council rates, which fund local infrastructure and services. 

They can vary a lot depending on your location, property value, services provided, and more. For example, in Local Government Association of South Australia data they estimate households in South Australia pay on average around A$29 per week in council rates. Many councils cap annual increases (e.g., in Victoria a ~3 % cap growth for 2025-26). 

So as a ball-park: for a mid-valued residential property you might expect to spend several thousand dollars per year in council rates.

Water Rates

You’re also responsible for ongoing water rates. 

Similarly to council rates, water rates have a wide variation by state/territory, household size and usage. In a survey by Canstar Blue (Jan 2024) the average quarterly water bill across Australia was about A$217 (≈ A$868 annually). 

The Australian Bureau of Statistics (ABS) gives a household average water price of about A$3.43 per kL. 

So you might reasonably budget for around A$800–1,000 per year for water/sewerage for an average household, depending on location & usage.

Strata or Body Corporate Fees

If you’re purchasing an apartment, townhouse or shared-property under a strata title, you’ll need to pay regular fees to cover the maintenance and running of the common grounds in the property. These fees usually cover things like building insurance, cleaning of shared spaces, gardening, lifts, pool/gym upkeep, and the sinking fund or reserve for major repairs. 

In terms of how much you should expect:

• For many apartment buildings in major cities, fees range from A$500 to A$2,500+ per quarter (so A$2,000-10,000+ per year) depending on location, building age, facilities and size. 
• More modest schemes (e.g., townhouses or fewer shared facilities) may run roughly 0.2% to 0.6% of the property value annually, while higher-amenity buildings might sit between 0.6% to over 1% of the property value. 

So when budgeting for property ownership in Australia and you’re buying into a strata scheme, add a few thousand dollars each year (or more in high-amenity/high-value settings) to your running costs for these levies.

Building Insurance

Most lenders require building insurance from the day you settle. Even if it’s not mandatory, it’s vital for protecting your home against damage, fire, or natural disasters.

On average, standalone building insurance premiums are around A$1,300 per year. If you bundle building and contents together, or live in a higher-risk location (flood, bushfire, cyclone), the annual premium can range from A$1,500 to A$4,500+, depending on state and property. 

Prices are rising: premiums increased by roughly 14 % to 16 % in the past year nationwide, with sharper rises in high-risk areas. 

Also be conscious of what affects your premium:

• The higher the value of your property, the higher the premium. 
• Living in a high-risk area pushes up premiums. 
• Newer, well-constructed homes with strong protection cost less to insure. 
• More cover = higher premium.

So, let’s summarise, what costs should you expect?

Upfront costs: 

• Property Deposit: You should aim for this to be ~20% of your property’s value. 
• Lenders Mortgage Insurance (LMI): If your deposit is less than 20% of the property’s value. LMI is commonly in the range of about 1% to 5% of your loan amount.
• Stamp Duty: This will be around 3-5% of the property value 
• Legal and conveyancing: Typically ranging from A$800 to A$2,500 for standard residential properties. 
• Building & pest inspections: Looking somewhere around A$400 to A$900 for a standard-sized house.
• Loan & Bank Fees: Lenders usually charge an application fee (around A$150–A$700), and a valuation fee (about A$100–A$300). 
• Moving Fees: Expect costs for local moves of A$300 to A$3,500 depending on a multitude of factors. For utility connection/disconnection fees are in the range of A$10 to A$130.

Ongoing costs: 

• Council Rates: In Local Government Association of South Australia data they estimate households in South Australia pay on average around A$29 per week
• Water Rates: In a survey by Canstar Blue (Jan 2024) the average quarterly water bill across Australia was about A$217 (≈ A$868 annually). 
• Strata or Body Corporate Fees: For many apartment buildings in major cities, fees range from A$500 to A$2,500+ per quarter. 
• Building Insurance: On average, building insurance premiums are around A$1,300 per year.

How to Save: Grants & Concessions

While these costs add up, there are several ways first-time buyers can save through government initiatives.

First Home Owner Grant (FHOG)

This one-off government payment helps eligible Australians buying or building their first home. It’s typically available for new properties and can significantly offset initial costs.

First Home Guarantee

Under this federal scheme, eligible buyers can purchase a home with as little as a 5% deposit without paying LMI — the government acts as a guarantor for the remaining amount.

Stamp Duty Exemptions

Many states and territories offer stamp duty concessions or exemptions for first-home buyers, saving thousands of dollars on upfront costs.

Final Word

Buying a property isn’t just about saving for a deposit. From stamp duty and solicitor fees to cleaning, moving, and insurance, the expenses in buying a house can quickly add up if you’re not prepared.

By understanding and planning for these hidden costs of buying a house, you’ll avoid financial surprises and move forward with confidence.

And remember, whether you need cleaning, moving, legal, or estate planning professionals, Bark helps you find trusted local experts to make every step simpler and stress-free.