Last updated: April 2026
Hidden Costs of Buying Your First Home in Australia
Your deposit is only part of the upfront cost of buying a home. Stamp duty, conveyancing, inspections, and loan fees can add thousands to your bill. The good news: first home buyer schemes can eliminate or significantly reduce many of these costs. This guide covers every expense you should budget for, both at purchase and after you move in.
Upfront Costs at a Glance
Here is a summary of the costs you may face on top of your deposit:
| Cost | Typical Range | FHB Benefit |
|---|---|---|
| Stamp duty (transfer duty) | $0 to $40,000+ | Exemptions and concessions in every state |
| Conveyancing / solicitor | $1,500 to $3,000 | No specific concession |
| Building inspection | $400 to $700 | No specific concession |
| Pest inspection | $200 to $400 | No specific concession |
| Loan application fee | $0 to $600 | Some lenders waive for FHBs |
| Lenders Mortgage Insurance | $0 to $20,000+ | FHBG eliminates LMI entirely |
| Strata report (if applicable) | $200 to $350 | No specific concession |
Stamp Duty
Stamp duty (also called transfer duty) is typically the largest single cost when buying a home. It is a state government tax calculated as a percentage of the property price, and the rates vary by state and territory.
The good news: every state offers concessions for first home buyers. Some provide full exemptions up to a threshold:
- NSW: exempt up to $800,000, concessions up to $1,000,000
- VIC: exempt up to $600,000, concessions up to $750,000
- QLD: exempt on new homes (no cap), concessions on established homes up to $700,000
- SA: no stamp duty on new homes with no value cap (since June 2024)
- WA: exempt up to $500,000, concessions up to $700,000 (metro) or $750,000 (regional)
- TAS: exempt up to $750,000 for new and established homes (until 30 June 2026)
- ACT: exempt up to $1,020,000 (full duty concession for FHBs)
- NT: various concessions depending on property value and type
Use our state-specific stamp duty calculators to get an exact figure for your situation:
Conveyancing and Legal Fees
A conveyancer or property solicitor handles the legal side of your purchase. Their work includes:
- Reviewing the contract of sale and explaining any special conditions
- Conducting property searches (title, zoning, planning, drainage, easements)
- Liaising with the seller's solicitor and your lender
- Managing the settlement process and ensuring all documents are properly executed
- Lodging stamp duty concession claims and FHOG applications where applicable
Expect to pay $1,500 to $3,000 for conveyancing, including disbursements (the fees for property searches). Get quotes from 2 to 3 conveyancers before choosing, and ask what is included in their fixed fee.
Building and Pest Inspections
For established properties, building and pest inspections are essential. They can identify serious problems before you commit to the purchase.
Building inspection: $400 to $700
A qualified inspector checks the structural condition of the property: foundations, walls, roof, plumbing, electrical, and any signs of damage or non-compliant work. They provide a detailed written report.
Pest inspection: $200 to $400
Checks for termites and other pests that can cause structural damage. This is especially important in areas prone to termite activity. Many inspectors offer combined building and pest packages at a reduced rate.
If you are buying a unit or apartment, also consider ordering a strata report ($200 to $350). This reveals the financial health of the body corporate, any planned special levies, and the condition of shared areas. It can flag major upcoming expenses that would affect your strata fees.
Ongoing Costs After Purchase
Many first home buyers focus on the purchase price and forget about the ongoing costs of home ownership. Factor these into your monthly budget:
- Council rates: $1,000 to $3,000 per year depending on your local government area and property value
- Water rates: typically $600 to $1,200 per year, plus usage charges
- Strata levies (if apartment or townhouse): varies widely, from $500 to $5,000+ per quarter depending on building facilities
- Home and contents insurance: $1,500 to $3,000 per year depending on location and property value
- Maintenance and repairs: budget 1-2% of the property value per year as a general rule (that is $6,500 to $13,000 on a $650,000 home)
These costs can add $5,000 to $15,000 or more per year to your housing expenses beyond your mortgage repayments. Make sure your budget accounts for them before you stretch to your maximum borrowing capacity.
How Government Schemes Reduce These Costs
First home buyer schemes can collectively save you tens of thousands of dollars on upfront costs:
Stamp duty exemptions
FHB concessions can reduce your stamp duty from tens of thousands of dollars to zero. This is one of the largest savings available. Calculate your stamp duty savings
FHOG offsets costs
State grants of $10,000 to $50,000 for new builds are applied at settlement, reducing your loan and helping cover upfront expenses. Check FHOG amounts by state
FHBG removes LMI
The First Home Guarantee eliminates LMI entirely, saving you $5,000 to $20,000 or more depending on your property price and LVR. Learn about the FHBG
FHSS builds deposit with tax savings
By salary sacrificing into super, you pay less tax on your deposit contributions, leaving more money available for these additional costs. See the FHSS calculator
Use the complete first home buyer guide to see how all schemes work together and the order to apply for them.
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Frequently Asked Questions
How much should I budget for upfront costs beyond my deposit?
Budget an additional $5,000 to $15,000 for a straightforward purchase, or up to $25,000 or more if stamp duty applies and you are not exempt. First home buyer concessions can significantly reduce stamp duty, and the FHBG eliminates LMI. Use the HomeStack calculator to estimate your total costs based on your state and property price.
Do first home buyers pay stamp duty in Australia?
It depends on your state and property price. Most states offer full exemptions for first home buyers up to a certain threshold. For example, NSW offers exemption up to $800,000, VIC up to $600,000, and ACT up to $1,020,000. Above these thresholds, a sliding-scale concession often applies.
Can I avoid paying for LMI as a first home buyer?
Yes. The First Home Guarantee (FHBG) lets you buy with a 5% deposit without paying LMI. The government guarantees up to 15% of the property value. Since October 2025, there is no income cap and places are unlimited. You can also avoid LMI by saving a 20% deposit or using a family guarantee.
What ongoing costs should I expect after buying?
Council rates ($1,000 to $3,000 per year), water rates, home and contents insurance, and maintenance (budget 1-2% of the property value per year). If you buy an apartment, add strata levies. These costs are often overlooked by first home buyers, so factor them into your budget.
Sources:
Housing Australia - First Home Guarantee | ASIC Moneysmart - Buying a Home | ATO - First Home Super Saver Scheme
Disclaimer: This information is general in nature and does not constitute financial, legal, or tax advice. Calculations are estimates only and may not reflect your exact circumstances. Eligibility criteria and dollar amounts may change without notice. Always verify with the relevant government authority, your mortgage broker, or a licensed financial adviser before making decisions.