Costs of Buying & Selling Property
Before deciding to buy and sell property it is important to consider all the costs involved. The costs of selling and buying a property can vary depending on numerous factors, such as the location of the property, the type of property, the method of sale, and the fees charged by professionals.
Below, we have outlined the most common costs associated with selling and buying property in Hobart.
Costs of Selling Property
Marketing and advertising costs: This includes the cost of advertising the commercial or residential property on different platforms such as websites, newspapers, and signboards. Marketing is an investment in ensuring the maximum outcome by exposing the property to as many potential buyers as possible.
Conveyancing or legal fees: This includes the cost of preparing legal documents, settling the sale, and transferring the property to the new owner. Conveyancers specialise in the legal aspects of buying and selling real property and can generally offer a fixed fee for their services.
Council and water rates: These are fees associated with owning the property and are usually adjusted at settlement to cover the period up to the settlement date. The conveyancer/solicitor will work out how this to be proportioned.
Capital gains tax (CGT): If you make a profit on the sale of your property that is not your principal place of residence, you may be liable to pay capital gains tax (CGT). However, in some cases, you may be eligible for exemptions or discounts. We recommend you check with your accountant or financial advisor regarding your status for CGT.
Repairs and maintenance: If there are any repairs or maintenance required to be done to the property prior to the sale, these costs may need to be considered.
Agent's commission: This is the fee charged by the real estate agent for marketing and selling the property, and it is usually a percentage of the sale price.
Costs of Buying Property
Deposit: A good deposit is around 10% of the purchase price, and it is paid upfront to secure the property, so this needs to be funds that are readily available to you, normally paid within one week of the date of the contract. Generally, this would be held in a trust account by the real estate agent or the solicitor/conveyancer until settlement. This amount does form part of the purchase price for the property.
Stamp duty: This is a government tax charged on the purchase price of the property, and the amount varies depending on the location and value of the property. There are also some concessions in place. To calculate your stamp duty payable, use the Tasmanian government's calculator.
Conveyancing or legal fees: This includes the cost of preparing legal documents, conducting title searches, and settling the purchase.
Building inspection: If required, this involves engaging a professional inspector to check for any structural issues or defects with the property you're buying. Ensure that the person engaged is an accredited building inspector with indemnity insurance.
Lender's fees: This includes application and valuation fees charged by the lender, mortgage insurance, and ongoing loan fees.
Moving costs: This includes the cost of hiring a removalist or moving the belongings yourself.
It is important to consider these costs when planning to sell or buy a property in Hobart to avoid any unexpected financial surprises. It is also recommended to seek professional advice from a real estate agent, conveyancer/solicitor, and financial advisor to better understand the specific costs involved for your individual situation.
If you would like a market appraisal or to discuss your individual circumstances with a MIX Property Representative, contact us today for a no obligation free chat.
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