Buying a property is not quite the same as heading to a retail store and picking an item, checking the price on the shelf and at the checkout counter having exactly the same price show up on the scanner. There are implicit costs which you must have prepared for the time of settlement (sometimes called “adjustments”) when you go through your purchase. We will attempt to outline a few here so that you are aware of what to anticipate. Please note that these costs are Uneek to your matter so they will vary, and this article is intended as a general guide for which adjustments to look out for rather than the actual costs of the adjustments.
Fair warning to those who are not algorithmically inclined, this next bit may seem a little technical with references to an “equals to” sign.
Purchase Price (‘PP’) plus Stamp Duty (‘SD’) plus Miscellaneous Charges (‘MC’) = Total Transactional Cost (‘TTC’)
This formula, when applied to a real-world example, may look as follows:
Purchase price: $750,000.00
Stamp Duty: $29,105
Miscellaneous Charges:
- Legal fees = Approx. $1500
- Council rates = Approx. $1200 per annum
- Water rates = Approx. $250 per quarter
- ELNO = $120
- Bank charges such as Bank solicitor fees and registration charges = $700
Purchase Price
The purchase price is the price on the contract you have agreed to pay. This one is simple and not very subject to change without all parties being aware of it.
Stamp Duty
Again, this one is obvious and is the stamp duty due on the purchase price as governed by the NSW Revenue office. This should include any exemptions that may be applicable to your transaction.
Bank Fees
These are fees that will be imposed as per the loan contract you have signed with your bank. They will include registration charges as well as any bank solicitor fees if applicable. These should be discussed and clarified with your lender or broker.
Miscellaneous Charges
There are a few costs that can fall under this bracket and if not considered, may blow out your budget considerably.
Legal Fees
This is self-explanatory and should be the total bill for your legal representative for acting on your conveyance.
ELNO Fees
These are generally for the use of an electronic platform to complete settlement as per the push to eConveyancing around Australia. Both Purchasers and Vendors will pay for this – the fees may vary depending on which electronic platform is used.
Adjustments
These are costs that are adjusted on a pro-rata basis between you and the seller. The seller pays until the settlement date from the start of the relevant period and you pay the balance from the date of settlement until the end of the relevant period. Some examples of what may make up adjustments are:
· Council rates
· Water rates
· Strata levies or community levies
· Strata insurance
· Credits (overpayment by the seller to be reimbursed)
· Land tax that the seller has paid
Reach out to Uneek Conveyancing today to help with the purchase of your property.