The Unexpected Additional Costs of Buying a Home in WA: A Guide for Homebuyers

At KDD Conveyancing, we know that buying a home is one of the most exciting milestones you’ll achieve. You’ve spent years working towards this moment, skipping holidays, saying no to nights out, cutting back on life’s little luxuries, and meticulously budgeting every grocery run. You’ve lived in a cramped rental or stayed with your parents to scrape together a deposit. Finally, the big day arrives. Your offer has been accepted, the property settlement process went smoothly, you hold the keys to your new home and the long game of homeownership begins. By that we mean the additional costs of buying a home.

For many first-time buyers in Western Australia, the hidden or unexpected costs of homeownership come as a shock. But they don’t have to. With the right planning and awareness, you can avoid the post-purchase stress and focus on making your property a home. That’s why we have created a helpful guide to shine the light on common post-purchase additional costs and maintenance. 

1. Transfer Duty (Stamp Duty) and Closing Costs

Beyond the purchase price, buyers often encounter closing costs, such as transfer duty, conveyancing fees, and loan setup charges. These costs can vary based on your property’s value, and it’s worth researching early to avoid surprises due to the inevitable additional costs of buying a home.

To estimate transfer duty, you can use tools like the Revenue WA Stamp Duty Calculator.

2. Council and Water Rates

As a homeowner, you’ll be responsible for annual council rates, which fund essential services like waste collection and local infrastructure. Water service charges and sewerage fees are also ongoing costs that begin from the date of settlement.

3. Strata Fees (for Strata Properties)

If you’re buying into a strata complex, such as an apartment or townhouse, you’ll have regular strata fees to cover shared amenities like gardens, pools, and building maintenance. These fees can vary depending on the property, and it’s important to review the strata disclosure carefully before purchasing.

4. Maintenance and Repairs

Every home requires ongoing maintenance, from small fixes like replacing a tap washer to larger projects like roof repairs or painting. A helpful guideline for many of our clients who are looking to manage the additional costs of buying a home is to set aside 1–2% of the property’s purchase price per year for maintenance and repair costs.

Example:

For a $500,000 1-bedroom unit, plan for:

• Annual maintenance costs: $5,000–$10,000

5. Moving Costs and Utility Connections

When moving into your new home, you’ll likely face one-off costs for connecting utilities such as electricity, gas, and internet. Moving expenses like hiring removalists or renting a truck can also add up.

It’s a good idea to research these costs in advance and include them in your planning.

6. Protecting Your Home

In Western Australia, pest control is an essential part of homeownership. The warm climate can attract termites and other pests, so regular inspections and treatments are recommended to protect your property from long-term damage.

Formulas to Guide Your Expectations of the Additional Costs of Buying a Home

The 28/36 Rule

This 28/36 rule is a helpful guide for determining what you can afford when buying a home:

• 28% Rule: Where your monthly mortgage repayment (including interest and insurance) should not exceed 28% of your gross monthly income.
• 36% Rule: Where your total monthly debts (including mortgages, car financing, and credit cards) should not exceed 36% of your gross monthly income.

Maintenance Budget Rule

Many apply the rule of planning to spend 1–2% of the home’s purchase price annually on maintenance and repairs.

We recommend that you seek financial advice from a financial advisor or consultant before planning any future property investments. 

Moving Cost Guide

Experts often advise to estimate 1–2% of the home’s purchase price for moving and setup costs, including removalists and utility connections.

These formulas are not definitive but serve as helpful tools to set realistic expectations and avoid financial surprises. Please consult your local financial advisor when considering budgeting extra costs.

Helpful Tools to Stay Organised

Managing the ongoing costs of homeownership is easier with the right tools:

• MoneySmart Budget Planner: A free tool to help you understand your financial situation and plan for expenses.
• Bill Tracker: Keeps track of regular payments like council and water rates.
• Revenue WA Stamp Duty Calculator: Helps estimate transfer duty based on your property’s value.
• Splitwise app: helps to divide home expenses like bills, loan repayments, registration fees and who owes them. 

Planning Ahead for Peace of Mind and Management of the Additional Costs of Buying a Home

Buying a home is an exciting achievement, but understanding the costs that come with it is crucial. By preparing for these expenses and using tools to guide your planning, you can enjoy your new home without unnecessary stress.

At KDD Conveyancing, we take pride in making the settlement process smooth and worry-free so you can focus on what comes next. If you’re planning to buy a property in Western Australia, contact us today for expert guidance.