Every dollar you spend buying and owning a home falls into one of three layers: upfront costs, transaction costs, and ongoing costs. This step gives you a framework for categorising those costs so nothing gets missed — not just at settlement, but for years afterwards.
According to the Finder First Home Buyer Report 2025, 47% of first-time buyers paid more than they budgeted — up from 38% in 2022 . One in seven had no savings left after buying . The main reason budgets fail is not bad maths. It is incomplete lists. Buyers focus on the deposit and the purchase price, then get blindsided by stamp duty, legal fees, insurance, maintenance, and a dozen other costs they never wrote down. A simple mental model — three layers, three time horizons — fixes this by giving you a place to put every cost before you commit.
The model: three layers, three time horizons
Buying a home is not a single financial event. It is three overlapping ones. Each layer hits your bank account at a different time, and each requires a different type of planning.
Layer | When it hits | What it covers | Typical range |
|---|---|---|---|
Layer 1: Upfront costs | Before you buy | Deposit, inspections, loan application fees, LMI | 5–20% of property value (deposit) plus $1,000–$40,000+ in fees |
Layer 2: Transaction costs | At or around settlement | Stamp duty, conveyancing, title transfer, mortgage registration | 4–6% of purchase price |
Layer 3: Ongoing costs | Every year you own | Council rates, insurance, maintenance, strata, utilities | $15,000–$25,000+ per year |
Layer 1: Upfront costs — before you buy
These are the costs you pay while searching and getting approved. They happen before you own anything.
Deposit. Most lenders want 20% of the purchase price. On an $800,000 property, that is $160,000 . You can buy with less — the Australian Government's Home Guarantee Scheme allows deposits as low as 5% — but a smaller deposit usually triggers lenders mortgage insurance.
Building and pest inspections. A combined report typically costs $450–$900 . Skipping this to save money is a false economy — a single structural defect can cost tens of thousands to fix.
Loan application fees. Lenders charge $150–$700 to process your application . The big four banks typically charge around $600.
Valuation fees. Some lenders charge separately for the property valuation, though many now include it in the application fee. Expect $200–$600 if charged separately.
Layer 2: Transaction costs — at settlement
These costs hit when ownership transfers. They are often the ones that catch buyers off guard because they add up fast and most are non-negotiable.
Stamp duty (transfer duty). This is a state government tax on the property transfer. It is almost always the largest transaction cost. On a $750,000 property, stamp duty ranges from roughly $15,000 in Queensland to over $40,000 in Victoria for a non-first-home buyer . First home buyers may pay reduced rates or nothing at all, depending on the state and the property value.
Conveyancing or legal fees. A conveyancer or solicitor handles the legal transfer of the property. Fees run from $800 to $2,500 depending on complexity . Title transfer and mortgage registration fees. State governments charge fees to register the change of ownership and your mortgage against the title. These vary by state but typically total $200–$500.
Layer 3: Ongoing costs — every year you own
This is the layer most budgets ignore entirely. These costs start the day you settle and continue for as long as you own the property.
Council rates. Local councils charge annual rates to fund roads, waste collection, and community services. The national average sits between $1,872 and $2,000 per year .
Water rates. A fixed service charge plus usage-based fees. Budget around $500 per year for an average household .
Home and contents insurance. Australians pay an average of $3,499 per year, with premiums varying sharply by location . Queensland and Northern Territory homeowners pay the most due to higher natural disaster risk — $4,398 and $4,547 per year respectively .
Maintenance and repairs. Budget at least 1% of the property value per year for general upkeep . On an $800,000 home, that is $8,000 annually. Older homes and houses with large gardens will cost more.
Strata or body corporate fees. If you buy an apartment, unit, or townhouse, you will pay quarterly strata levies. These range from $400–$1,000 per quarter for a townhouse to $600–$2,500 per quarter for an apartment .
Utilities. Electricity, gas, internet, and other services average around $390 per month, or roughly $4,700 per year .
Putting it all together
Here is what the three layers look like for an $800,000 property with a 20% deposit, purchased by a non-first-home buyer:
Cost | Amount |
|---|---|
Layer 1: Upfront | |
Deposit (20%) | $160,000 |
Building and pest inspection | $700 |
Loan application fee | $600 |
Layer 2: Transaction | |
Stamp duty (varies by state) | $20,000–$40,000 |
Conveyancing | $1,500 |
Title and mortgage registration | $400 |
Layer 3: Ongoing (annual) | |
Council rates | $2,000 |
Water rates | $500 |
Home and contents insurance | $3,499 |
Maintenance (1% of value) | $8,000 |
Utilities | $4,700 |
Total upfront + transaction | $183,200–$203,200 |
Total ongoing per year | $18,699 |
Why three layers, not just a list
A flat list of costs is better than nothing, but it misses a critical dimension: time. Upfront costs require savings you must have before you start looking. Transaction costs require cash (or borrowing capacity) at settlement. Ongoing costs require reliable income for decades.
Each layer needs a different financial plan. Lumping them together leads to the exact budget failures that leave 47% of first-time buyers overspent .