The Real Cost Of Buying A Home In 2021

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If you want to know the real cost of buying a home, you’re in the right place. It’s likely you’ve already considered some of the costs associated with buying. These include:

  • The purchase price
  • The deposit
  • Stamp duty
  • Conveyancing fees

However, you may not realise there are a number of lesser-known fees associated with buying your first home. These can catch unsuspecting buyers unaware. Therefore, it’s important to understand exactly which fees apply to your property so you can avoid any nasty financial surprises.

Below we look at the real costs involved in buying a first home in Western Australia in 2021.


For this article, our calculations are based on the following:

  • The property is a residential home, not an investment property;
  • The property is your first home;
  • You qualify for the First Home Owners Grant;
  • The purchase price of the property is $500,000;
  • You have a $50,000 deposit;
  • The property is located in Western Australia.


Even though your deposit is technically not a cost, it’s money you’ll need to have available to secure your home loan. Currently, in WA, the deposit required can vary from 5% (sometimes lower) to 20% or above. With a deposit of 20% of the purchase price, you’ll be borrowing 80%. If your deposit is less than 20%, you will need Lenders Mortgage Insurance (LMI), covered in a later section.

Loan-to-Value-Ratio (LVR) The LVR represents the amount you’re borrowing (your mortgage) as a percentage of the value of the property you’re buying (purchase price). Therefore, the larger your deposit, the lower your LVR. In the case of our $500,000 property, a 10% deposit of $50,000 equates to an LVR of 90% and will require LMI. When considering financing, we recommend that you speak with a qualified Mortgage Broker or your bank.

Home Buying Costs

Transfer (Stamp) Duty – $13,433

Transfer or stamp duty is a state government tax placed on legal documents during the transfer of property. Stamp duty is payable by the purchaser. In WA, First Home Buyers may be eligible for exemptions or concessions on stamp duty, as long as the home they purchase is their primary residence. If this is the case for you, you’ll be exempt from paying stamp duty on homes of up to $430,000 in value. Above this level, concessions are available on homes priced between $430,001 and $530,000.

At the First Home Buyers concessional rate, the stamp duty payable on a $500,000 property in WA is $13,433 (The full rate is $17,765.) Follow this link to calculate the stamp duty on your specific property.

Conveyancing – $2,000

Conveyancing fees are the costs associated with the settlement of a property transaction. They are split into two types of charges:

  1. Professional service fees which the conveyancer charges for their work on your behalf.
  2. The disbursements charged by government agencies and third-party institutions.

As a home buyer, you’ll need to pay conveyancing fees to purchase your home. Estimated conveyancing fees on a $500,000 property are: Professional Service Fees – $1200 Disbursements – Government, Statutory and Third Party Charges

  • Electronic conveyancing fees – $115
  • Government inquiry fees – $250
  • Search fees – $90
  • Landgate registration fee – $265
  • Verification of Identity (VOI) fees – $49 per person

(Get A Conveyancing Fee Quote)

Mortgage Registration Fee – $181

If you’re taking out a mortgage, you’ll be required to pay a fee to Landgate for the registration of the mortgage on the property title. Yes, we think it should be paid by the banks, too, but that’s an argument we’re probably not going to win. The exact amount you’ll be required to pay is $181.30.

Loan Establishment Fee – $500

Loan application or establishment fees are charged by your lender to process your mortgage application and create your mortgage documentation. These fees vary depending on the lender’s guidelines, the loan structure, your credit rating and the perceived risk for the bank or lender. Currently, many of the big banks are waiving this charge on straightforward loans. However, other lenders can charge from $250 to $950, depending on your circumstances.

Property Valuation Fee – $500

The valuation fee is charged by your lender to assess the value of your property. It will vary depending on their charges and how much you borrow. Some lenders may waive the cost of valuation, but others could charge from $200 to $600.

Lenders Mortgage Insurance (LMI) – $14,000

As mentioned earlier, if you borrow over 80% of the price of your property, you’ll usually be charged Lenders Mortgage Insurance. This insurance can usually be added to your loan but keep in mind you’ll be paying interest on that amount for the life of the loan. The cost of LMI is calculated on the amount of your mortgage. On a $500,000 property with a 90% LVR and a $450,000 loan, you’ll be paying around $14,000.

Water and Local Council Rates – $2,450

Water Corp and local government councils levy annual rates and charges to all residential homeowners in WA to pay for services and amenities. These need to be paid upfront at settlement, so the pro-rata amount must be available.

  • Water rates and fees are calculated in two ways and charged bi-monthly. There is a fixed water service charge of $268.98 for 2021-22 throughout the state. A metered charge is also applied based on the amount of water used. During settlement, these rates will be adjusted pro-rata as of 30/06 and maybe $220 per bill cycle.

Estimate $1300 – $1600 annually but expect to pay $150 – $250 up front.

  • Council rates are charged each year and paid in advance by homeowners. Your property’s rates are calculated by multiplying the Gross Rental Value (GRV) of your property by the rate in the dollar, determined by your council. The Department of Fire and Emergency Services (DFES) levy is also calculated using the GRV.

Each council charges a different amount so estimate $1800 – $2200.

Title Insurance – $600

Title insurance offers you protection on your property’s title. It covers you for financial loss and associated legal expenses if there is an issue or challenge with your property title. This insurance is a one-time premium determined at the time of purchase. It is optional but highly recommended at approx. $600.

Property Inspections – $1,000

During the home purchase process, it is recommended that the property is inspected for structural issues and timber pests. Although not absolutely necessary, these inspections are recommended for ordinary residential homes.

  • Structural Inspection – This inspection is to confirm that the property is structurally sound. Typically this focuses on the foundation, joists, beams, trusses, or columns which form the building’s load-bearing structures. This type of inspection will cost around $500.
  • Timber Pest Inspection – A qualified pest inspector will view the property to confirm it is free from timber pest infestation and damage. If signs of infestation are present the property may need to be treated. A timber pest inspection will cost approx. $350 – $500. Treatment for termites will cost extra.

Companies may offer both services at reduced rates.

Insurance – $1,500

  • Building Insurance – Home building insurance covers you if your home is destroyed or damaged by weather, natural disaster, fire, explosion etc. Building insurance is usually a condition of your mortgage contract. It’s important that you are properly insured for the full replacement value of your home. For example, the replacement cost to rebuild a $500,000 property maybe $350,000 or more. Annual building insurance premiums to cover this could range from $900 to $1300 pa.
  • Contents Insurance – Home contents insurance offers you protection in the event of a robbery, damage or loss of your personal effects, furniture, fixtures, fittings and appliances. In the average home, you may need to cover the replacement cost of $60,000 to $100,000 or more, depending upon the value of your belongings. Annual contents insurance premiums to cover this could range from $300 to $600 pa.

Although these costs are ongoing and can be paid on a monthly basis, you still need to account for these expenses upfront. To assess your insurance needs always consult with your provider. Many will offer reduced premiums for combined home building and contents policies.

Total Cost Of Buying A Home In 2021 – $36,164

Additional Costs

Strata Levies

Depending upon the type of property you purchase, strata levies, insurance and corporate fees may not apply. Generally, a free-standing, green-titled lot without shared areas or services and will not attract these fees. However, if you purchase a villa, unit, duplex, townhouse, apartment or home with common areas or services some fees will usually apply. Levies can range from $50 to $1500, or more, per quarter, especially if your complex has a pool, gym, entertaining area or lifts. This is why it is essential to identify these fees before proceeding with your purchase.

Moving Costs

The costs involved in relocating to a new home involve your time, effort and money. For removalists, the general rates range from $165 to $200 per hour for a team of two people and a specialised truck. Depending on the number of home contents you have to move and the distance between your old and new locations, this can take four to eight hours to complete, or more. According to your circumstances, allow for approx. $1000.


As you can see, each property transaction will have its own set of costs. It is up to you and your qualified advisors to calculate your specific figures. If you have any questions, please feel free to contact us at Residential Settlements.

Peter Fletcher

Meet Peter Fletcher, a real estate expert with over 30 years of experience. As the Managing Director at Rezzi, Peter is a licensed settlement agent and real estate agent. His knowledge and expertise have been recognized in the industry, serving as a councillor and trainer for REIWA and AICWA. With Peter on your side, expect expert guidance and unwavering support throughout your property journey.