Whether you’re just starting your portfolio, looking to expand or entering the consolidation phase, ensure you include all costs and charges in your planning when making the buy / sell / hold decision on each property.

If you’re trying to make that all important decision as to whether you should hold, sell, upgrade or invest in another property, we have developed a checklist that may assist you in considering the range of aspects involved in this decision.  Send us an email at debra@propertyfrontline.com.au and we’ll ensure you receive your copy.

The checklist considers issues other than just the numbers, which of course also play a great role in making your decisions.  See below for a summary of the costs and charges involved in the key phases of buying, holding or selling.


Purchase price and deposit

When considering purchase price, ideally factor in a 20% deposit which will need to be drawn from either savings or equity from another property. Lenders will generally ask for a minimum deposit of 10% to 20% but this may vary further if a family member pays the deposit, signs as guarantor or buys the property with you as a co-owner.

Lenders mortgage insurance

Lenders mortgage insurance is only applicable if you are borrowing more than 80% of your property’s value. This insurance ‘insures’ the lender if you default on your loan, and shouldn’t be confused with mortgage protection insurance, which protects the buyer if they are unable to repay the loan.  Cost: Varies, dependent on the size of your loan and of your deposit. Upwards of $6,000.

Stamp duty and related government fees

Stamp duty is a land/property transfer tax applied by all Australian state and territory governments except the Northern Territory.  It is one of the most significant upfront costs you’ll have to pay and it can vary greatly depending on where your property is located.

Use one of the many online stamp duty calculators to obtain an indication of your total costs.  Depending on your personal circumstances, the value of the property and the type of property, you may be exempt from paying stamp duty or be eligible for concessions.

In addition to stamp duty, mortgage registration and transfer fees also apply and differ from state to state.

Legal and conveyancing fees

Engaging a real estate conveyancer or solicitor who specialises in conveyancing is highly recommended when buying a property.  Your conveyancer will review the contract, ensure there are clauses that protect you, validate ownership and property specific items such as zoning, and coordinate the settlement process.  Cost: $1,000 to $4,000.

Loan application

This is also referred to as an establishment, up-front, start-up or set-up fee. It is a one-off payment to your lender when your loan commences. Fees can vary depending on your provider and will cover things such as credit checks, property appraisals and basic administration.  In some circumstances, lenders will waive these fees.

Building, pest and strata inspection reports

These inspections will alert you to structural problems or defects that may not be visible to the eye — asbestos, termites, electrical, ventilation and plumbing faults.  A strata report, if you’re buying a townhouse or apartment, can tell you whether the property is well run, well maintained and adequately financed.  Cost: Between $300 to $800.

Moving costs

Often overlooked when planning a new home purchase, moving costs can be considerable depending on the amount of contents required to be transported and the distance required to travel.

Outlined below is an example of the total purchasing costs for a $400,000 property.

Holding or ongoing costs

Loan repayments

Depending on the type of property you are buying – for example, home or investment – you may choose to make minimal repayments on your actual loan.  But eventually, the aim should be to pay down your loan, particularly if your goal is to replace earned income with rental income.

Speak to an experienced mortgage broker to understand the range of options available, and consider using an offset account which is linked to your loan.  An offset facility is a transaction account linked to a loan to help reduce the interest payable against your outstanding loan balance.

Interest charges

You’ll pay interest on the money you borrow, so it’s a good idea to compare what different lenders can offer and to check the comparison rates. You can generally choose a fixed or variable rate, or a combination of the two. This is worth some research as it can make a big difference to your repayments, particularly if interest rates move up or down.

Council rates

Each local council will set its own rates, and then will typically use your property’s land value (as set by the Valuer General) to determine your annual council rates.  This fee is used by the council to provide items such as footpaths, libraries, waste management and council operating costs.  Before you purchase your property, ensure you obtain a review of the council rates and factor this into your analysis of the property.

Utility costs

Covering water, gas, electricity, and in some cases internet.  Normally, tenants are required to cover these costs in investment properties although in some States you may be required to pay for water costs.  Costs will depend on usage.

Land tax

Land tax is another state based tax, and varies across Australia. Each state has a different threshold, so if you diversify your properties, you may not have to pay this tax at all.  Cost: Varies with each state. In New South Wales, this can be up to $10,000 to $15,000+ per annum depending upon the value of the property you own, whereas land tax is exempt in the Northern Territory.

Insurances-building(if you don’t have body corporate),contents,landlord and mortgage protection

When purchasing a property, you will need insurance to protect yourself against unforeseen events. While it can be expensive, it may save you several thousand more.  Cost: can amount to over $1000 per year.

Body corporate/strata fees and the sinking fund

If your property is part of a body corporate, where the general areas (such as gardens, rooftops, driveways) are maintained by a central group, you will be required to pay body corporate or strata levies.  There are benefits to a central management of shared facilities, but in many cases the fees can be considerable.

When considering a property on strata title, always investigate the sinking fund requirements.  This is a fund all members of the strata contribute to in order to provide for future major costs, such as replacement of electric gates or elevators.  The costs can be extensive and may make an otherwise attractive property completely unattractive.  Cost : a few hundred – but will vary depending on the style of building and what’s included. If you opt for all the extras (lifts, covered parking, pools, spas, gyms) you can be looking at a few thousand dollars per quarter.

Property management costs

This will be a percentage of your weekly rent, but there are extra costs so make sure to ask each prospective property manager for a full break down of the fees they charge.  Cost : $300+ per year, as well as up to 10% of each months’ rent.

Tenant attraction

If your rental property is not already tenanted, you may be required to pay to advertise for new tenants and a selection fee which covers the work your property manager may do to attract and conduct background checks on rental applications.  These costs may also be wrapped into your property management fee, so check the agreement to ensure you’re aware of any ancillary costs.


In a perfect world, your property is never vacant – but it is generally recommended to plan for a minimum of two weeks vacancy.  Cost : Two weeks of rent or upwards of $500.

Ongoing property maintenance

This can include everything from the occasional broken appliance, through to general plumbing, electric, and carpentry. Cost : Will depend on the age and condition of the property, but the best recommendation is to allow $1,000 to $2,000 per year.


All property at some point will require renovations, so be sure to assess the state of your property and factor in reasonable costs.  The caution here is to ensure you don’t over capitalize, and match the quality of your renovation to the local market.


The good news is that all of the above costs are usually tax deductible. If you’re a low-income earner, however, be wary that you don’t bite off more than you can chew and have finance buffers in place to manage short term overages.

Outlined below is a table showing holding costs for a $400,000 house.


Agent’s fees

This is one fee that many property owners really begrudge paying as the fee can run into more than $100,000.  While there are sites that can assist you to sell your property yourself, usually it is best to use an agent as they will have the skill and facilities to help you maximise your sale price.  Cost can be anywhere from 1.5% and up of the sale price.

Mortgage release fee

These fees have largely been eliminated from the market but check with your bank as to whether this fee will apply to you.


The sale process for property cannot commence until a ‘Contract for Sale’ has been prepared and – if you’re working with an agent – presented to a real estate agent.  During the preparation of the contract, your solicitor will validate key points relating to the property (zoning and pipeworks) and add in any key conditions you require such as the settlement period and items you will sell with the property.

Capital gains tax and GST

Capital gains tax is the tax investors pay on the investment profit they make when they sell an investment.  If you have held a property for more than 12 months, the government currently allows a 50% discount.  This means tax is calculated on 50% of the profit you have made from a sale.  When selling your principal place of residence, no capital gains tax is paid.

GST is also a tax that needs to be factored into your sale costs, particularly if you are selling a project – for example, when you sell one town house but keep one.  Check with your accountant to obtain advice on GST impacts, and ensure you factor this into your feasibilities before you start your project.

Change to your tax position / benefits

Selling an investment property will impact the income and expenses you have been (hopefully) declaring each tax year.  Therefore, you may find your taxable band may be impacted, ultimately changing your total remuneration.

Outlined below is an example of the costs involved in selling a property for $500,000.

Variables and strategy

In addition to the items listed above, there may also be property specific costs so be sure to assess all items prior to taking action. Remember also to check your decision making against your portfolio plan – links to the blogs relating to our portfolio strategy series can be found via the following page https://www.propertyfrontline.com.au/resources

About the author

Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline.  She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses.  She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics.  She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.

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Disclaimer – This information is of a general nature only and does not constitute professional advice.  We strongly recommend you seek your own professional advice in relation to your particular circumstances.