When you buy a property, the final price you pay is more than you think. In some cases, a lot more. What buyers need to know is that the final price of a property includes fees and taxes. In this article, we’ll give you a comprehensive summary of the taxes, fees and costs that are added onto your property price so you can make an informed decision about how much you pay for your next property.
1. Stamp Duty
When you buy a property in Victoria, the land transfer duty (commonly stamp duty) applies to your purchase, whether this is your first home, an investment property or holiday home. Stamp duty on property purchase is a state government tax collected by the State Revenue Office Victoria. It is calculated on the dutiable value of the property, normally this is the price you paid for the property.
Calculated on a sliding scale, duty starts at 1.4 per cent for properties valued at $25,000 and rising to 5.5 per cent for those valued at or above $960,000. You can use this calculator for a quick estimate of the applicable stamp duty on your purchase.
For first home buyers, you may be eligible for exemptions or concessions, click here for more information on your eligibility.
2. Land Transfer Registration/Lodgement Fees
When you buy a property, you are essentially transferring the legal ownership of the property into your name. This legal transfer would have to be registered with the government and would then incur a registration/lodgement fee. Land Use Victoria is the government agency that charges this fee for managing the register.
To calculate this, it is the sum of $89.50 plus 2.34 for every whole 1000 of the purchase price. For example, if you purchase a property at $750,000, the fee payable would around $1,845.
3. Mortgage Registration Fee
Looking to borrow? This is relatively a smaller fee of around $120 that registers the physical property as the security on a home loan. This is also charged by Land Use Victoria.
4. Adjustment costs
When settlement falls due, rates and allowances such as council rates is adjusted and calculated so that the purchaser becomes liable for rates as from the settlement date to the end of the rating period.
Basically, that means the vendor will be adding the purchaser’s portion of rates onto the purchase price.
For example, if the vendor has paid the council rate of $1,000 for the year ending 30/06/2021, settlement day is 01/01/2021, the purchaser would be liable for paying $500 that is for the period from 01/01/2021 to 30/06/2021.
5. Conveyancing Fee
This is where W Legal Group comes in to assist. Our conveyancing services include reviewing contracts, prepare paperwork and right through to settlement day where we help you assume legal ownership of your property.
Since 2011, we’ve worked on thousands of transactions, so we have the experience required to recognise possible problems and issues and fix them. We also can act as a proactive advisor.
For buyers, we charge our conveyancing fees at settlement, a fixed fee of $1,200 including GST and all disbursements.
Contact us if you any questions, do not hesitate to email us at hello@wlegalgroup.com.au or call us on +61 3 9590 618.
