5% fees on buying a house??

[spock]

I've just heard from my better half that we have to pay 5% fees on the house price that we pay!! Is this true?

Is this stamp duty, or is it something else? Another way of siphoning money from my bank account?

Does anyone know what this is for?

Good heavens! I hear that Australians move house a lot - how on earth can they afford it??


Spock.

[spock]

She's just showed me the item in the Red Lines guide "Emigrating to Australia and New Zealand 2007" - it's just come out.

On page 65 it says:

"Additional Costs
Keep in mind that in addition to the deposit, you'll need extra cash for closing costs. All in all, to get through closing, or 'settlement', as it's called in Australia, the cost will typically be around five percent more than the agreed-upon selling price"

So you folks who've actually bought already, what is this about? I assume that part of this settlement will be stamp duty, solicitors' fees, etc?

Is that right? Is there anything else that it needs to cover?

Thanks,

Spock.

[spock]

Sorry, I always call it that. Its RED GUIDES.

[BullcreekBob]

G'day

Fees vary from state to state and according the selling/buying price so it's not possible to give an accurate answer unless you say where and how much. Also some state give discounts to permanent residents buying their first house.

Stamp duty on the transfer of land is usually the highest fee, but there are registration fees for the transfer of land, registration fees to register the mortgage, stamp duty on the mortgage, conveyancing/settlement/solicitors fees as well as various fees for searching government and council records and you normally need to repay some of council and water rates to the seller. Using 5% as a guide is fine but it can be higher or lower.

Selling costs are also much higher here than in the UK so it can work out very expensive if you need to move because you bought early and in the wrong place. I've always used an estimate of almost 10% to cover selling fees, moving costs and buying fees.

Hope that helps
Bob

[spock]

Thanks again Bob.

I thought this 5% must likely include the stamp duty, but asn't sure.

I think we'll probably stay put once we're there!

Cheers,

Spock.