The seven costs first home buyers forget to budget for

Beyond the deposit itself, Australian first home buyers commonly forget to budget for seven categories of costs: stamp duty (often the biggest surprise), legal and conveyancing fees, building and pest inspections, loan and application fees, insurance from settlement day, moving and setup costs, and ongoing property costs like council rates and body corporate fees. Depending on your state, property price, and eligibility for first home buyer concessions, these can add anywhere from $5,000 to $50,000 to the true cost of buying. Budgeting for all seven from the start prevents unpleasant surprises and gives you a realistic picture of what you actually need.

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This post is part of the How to buy your first home in Australia: a woman's step-by-step guide. If you want the broader picture, start there.

One of the most common conversations I have with first home buyers goes something like this:

I've saved $50,000 for the deposit. That's enough for a $500,000 house, right?

The honest answer is: it depends, but probably not. Because the deposit is just one part of the picture. Depending on your state, property price, and eligibility for various concessions, the extra costs of buying can add anywhere from $5,000 to $50,000+ to what you actually need.

Here are the seven costs first home buyers most commonly forget, so you can budget for them properly from the start.

1. Stamp duty

The single biggest surprise for most first home buyers. Stamp duty (also called transfer duty) is a state tax on property purchases, calculated on the property price.

The good news: most states offer first home buyer concessions or exemptions.

Examples for 2026 (verify current with your state revenue office):

• NSW: No stamp duty for first home buyers on established homes up to $800,000. Reduced rates from $800,000 to $1,000,000.
• Victoria: No stamp duty for first home buyers on homes up to $600,000. Reduced rates from $600,000 to $750,000.
• Queensland: First home buyer concessions apply up to specific price caps.
• Other states: Similar concessions with different caps.

If you're a first home buyer within the price caps, stamp duty can be zero. If you're outside the caps (or not a first home buyer), stamp duty can be $10,000 to $50,000+ depending on price and state.

Budget for: Zero if fully eligible for concession, otherwise up to 5 percent of purchase price. Check your state revenue office for exact rates.

2. Legal and conveyancing fees

Someone needs to handle the legal side of your property purchase. This can be a conveyancer (property law specialist, generally cheaper) or a solicitor (broader legal expertise, generally more expensive).

For most straightforward first home purchases, a conveyancer is fine. For more complex situations (buying through a trust, buying with a family member, buying during separation), a solicitor may be more appropriate.

Budget for: $1,500 to $3,000 for a conveyancer, up to $4,000 for a solicitor. Cheaper in some states than others.

Additional legal costs may include:

• Title searches: $50 to $200
• Council and water searches: $150 to $400
• PEXA settlement fee: around $150

3. Building and pest inspections

The most under-budgeted category. Building and pest inspections identify structural issues, pest damage, and potential problems before you commit to purchasing.

Non-negotiable. Every time. Every property. Even properties that look perfect.

A $600 inspection can save you $60,000 in surprises after settlement. Skipping the inspection to save money is the false economy first home buyers regret most often.

Budget for:

• Standard building and pest inspection: $500 to $1,000
• Strata inspection (for units and townhouses): $250 to $600 (in addition to standard inspection)
• Specialist inspections (asbestos, electrical, plumbing if concerns arise): $200 to $800 each

4. Loan and application fees

Different lenders charge different fees. Common ones include:

• Loan application or establishment fee: $0 to $800
• Valuation fee: $200 to $500 (some lenders absorb this)
• Settlement fee: $200 to $500
• Legal fees for the lender's paperwork: $200 to $400
• Ongoing account fees: $0 to $500 per year (some lenders have monthly or annual fees)
• Discharge fee (when you pay off or refinance): $200 to $400

Some lenders offer "no upfront fees" loans but charge higher interest rates. A broker can walk you through the true comparison.

Budget for: $500 to $2,000 in upfront lender fees, plus ongoing fees over the life of the loan.

5. Insurance from settlement day

Your lender will require building insurance from the day the contract goes unconditional (or from settlement, depending on state and contract). This is not optional.

Building insurance: Covers the building itself against damage. Required by lenders.

Contents insurance: Covers your belongings. Not required by lenders but strongly recommended.

Landlord insurance: Only if you're buying an investment property. Not applicable for owner-occupied purchases.

Budget for: $500 to $2,500 per year for building insurance (varies significantly by property value and location). Contents insurance adds another $300 to $1,000+ per year.

For flood-prone or bushfire-prone areas, insurance can be significantly more expensive. Check quotes before finalising your purchase.

6. Moving and setup costs

Often forgotten, sometimes significant.

Moving costs:

• Professional movers: $500 to $3,000+ depending on distance and volume
• Truck hire (DIY): $200 to $500
• Boxes and packing supplies: $100 to $300

Utility connections and setup:

• Electricity/gas connection: $50 to $250
• Internet setup: $99 to $200+
• Water connection: $50 to $200

Initial setup:

• Immediate repairs or maintenance: $500 to $5,000+ depending on property
• Furniture and appliances if the property is unfurnished: highly variable
• Cleaning: $150 to $500 (many buyers do this themselves)
• Locks changed (recommended): $200 to $500

Budget for: $1,000 to $10,000+, depending on distance, volume, and setup needs.

7. Ongoing property costs

Once you're in, the ongoing costs continue.

Council rates:

• Typically $1,500 to $3,500 per year
• Higher in some council areas, lower in others
• Payable quarterly, half-yearly, or annually depending on council

Water rates:

• Fixed component (property connection): $500 to $1,000 per year
• Variable component (usage): depends on use

Body corporate fees (for units and townhouses):

• Varies enormously ($500 to $10,000+ per year)
• Check the strata report before buying to know what you're signing up for

Building insurance:

• Ongoing annual cost as noted above

Repairs and maintenance:

• Budget rule of thumb: 1 percent of property value per year for ongoing maintenance
• Older properties often need more; newer properties less

Land tax (if applicable):

• Usually not applicable for owner-occupied homes (main residence exemption)
• Applicable for investment properties above state thresholds

Budget for: $3,000 to $15,000+ per year in ongoing property costs beyond your mortgage repayment.

Putting it all together

Rough total additional costs (beyond the deposit) for a $600,000 first home purchase in Sydney with full first home buyer benefits:

• Stamp duty: $0 (concession)
• Legal fees: $2,500
• Inspections: $700
• Loan fees: $1,000
• First year building insurance: $1,500
• Moving and setup: $3,000
• Total additional upfront costs: approximately $8,700

Same purchase without first home buyer benefits (e.g., not eligible for stamp duty concession):

• Stamp duty: $22,000
• Legal fees: $2,500
• Inspections: $700
• Loan fees: $1,000
• First year building insurance: $1,500
• Moving and setup: $3,000
• Total additional upfront costs: approximately $30,700

Plus ongoing annual costs of $3,000 to $10,000+ depending on property type.

How much should I add to my deposit calculation?

A rough rule for planning:

• If you're eligible for full first home buyer stamp duty concessions: Add $8,000 to $15,000 to your deposit target
• If stamp duty concessions are partial: Add $15,000 to $30,000 to your deposit target
• If you're paying full stamp duty: Add $25,000 to $50,000 to your deposit target

These are estimates and vary by state, property price, and situation. Talk to your broker for a specific calculation for your target property and state.

Frequently asked questions

Can I include buying costs in my home loan?

Some, but not all. Lenders will typically let you capitalise LMI into the loan (if applicable). Some will let you borrow small amounts for buying costs through cashout arrangements, but this is limited by loan-to-value ratio caps and lender policy. Most buying costs need to be paid from your own funds, not borrowed.

How much should I have in reserve after settlement?

At least 3 to 6 months of loan repayments and living expenses. As a first home buyer, you don't want to be down to your last dollar after settlement. If a hot water system breaks or you lose your job, having a buffer means you can absorb it. Aim for at least $5,000 to $10,000 sitting separately after settlement, more if possible.

What's the biggest hidden cost first home buyers don't expect?

Stamp duty, if they're not eligible for a first home buyer concession. It's a state tax that can add tens of thousands to the true cost of buying. Always check your eligibility for concessions before finalising your budget.

Do I need to budget for renovations before I buy?

If the property needs work, yes. If it's move-in ready, no immediate renovation budget is needed, but keep some funds available for the inevitable small things that come up in the first year. Older properties typically need more.

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This article is general information only and does not constitute financial, legal or tax advice. Please speak to a licensed financial adviser, solicitor and your accountant about your specific circumstances.

Rielle Berglund is a mortgage broker and the founder of Matilda Tree Finance. She works with Australian women navigating major financial transitions, including separation, divorce, terminal illness and bereavement. She is also the creator of Runa, a free financial literacy app built for exactly this stage of life.

Book a confidential conversation with Rielle at matildatreefinance.com.au or start with Runa, free, at runaapp.com.au.

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You may also find these helpful

• How to buy your first home in Australia: a woman's step-by-step guide
• How much deposit do you really need to buy your first home in Australia?
• What actually happens on settlement day: a first home buyer's guide

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Sources and references

This article draws on Rielle Berglund's professional experience as a mortgage broker. The following sources are relevant to topics covered:

• ASIC Moneysmart on home loans: moneysmart.gov.au/home-loans

For state-specific stamp duty rates and concessions, refer to your state or territory revenue office.