The Ten Hidden Costs of Building or Buying a House

October 15, 2018

It's not breaking news to say that building a house costs some fairly decent money. It costs ALOT of fairly decent money.




I’m a big (understatement of the century) believer that the saying- “look after the cents and the dollars will take care of themselves” will ring true for most aspects of life’s costs.


What happens though when your cents are constantly being drained by the unexpected, unforeseen costs of building (or buying a house)?


As much as we scoured forums and spoke to other people who had been in our position so we could have an accurate idea of what needed to be paid for, we have still had moments of surprise when it comes to the small (and big) things along the way.


So here is a list of the top ten! 


1. Stamp-duty

This would be one of the biggest hidden costs of buying a property hands-down. If you’re not a first home buyer and buying an established house for $650,000 in Victoria then you’re looking at a cool $35k bill for the privilege of owning your own home. We are first home buyers so given we are in Victoria and bought our land in May 2017, we are eligible for a 50% reduction to our stamp duty. Great we said! a $10,000 bill was automatically halved- or so we thought. What we didn’t realise is that the bank actually take the full $10,000 then we have to sell our soul and grow a few grey hairs to apply to the State Revenue Office to get our money back- yes, the money we should have just kept in the first place! Now there is a 100% reduction for first home buyers in Victoria so hopefully this isn’t an issue for most but buyer beware- do your research before signing on any dotted line.


​2. Identity confirmation with AusPost

From the biggest cost, to the smallest. We were none too impressed that before the land title was transferred in to our name, we had to take 100pts of ID in to Australia Post and pay $44 each just to prove that we are who we say we are. You would think that since we’ve both got passports, drivers licences, lodge tax returns every year, that all of the above would be enough to verify our identity without the random $44 “processing fee” but whatever. It was annoying.


3. Owners (Body) Corporation Fees

This annual fee can apply to anyone who builds or buys a house or apartment which have any common areas or facilities. This is a bill in addition and completely seperate to the council rates, where you pay to use and/or maintain the common areas you share in the building or surrounds. Since we are building in an estate which includes a golf course, gym and pool, we will be paying approximately $1500 yearly to maintain use of these facilities (which is cheaper than a standard gym/pool membership anyway).


4. Conveyancer

Okay, so this is a touchy subject with Steve and I because we refer to our conveyancer as “she who must not be named”. I’ve been tossing up whether to write a post about what conveyancers do but to be honest, ours was so disappointing, I still don’t have a damn clue. We think, they are responsible with communicating with us and the developer to finalise paperwork for land transfer and contract signing. What we got was a hot mess of horrible communication, unapproachable and chaotic service which we had the pleasure of paying $1000 for. Before we (unfortunately) chose our conveyancer, we received quotes for two others- the prices ranged from $800 to $1200


5. Title insurance

This protects you from any costs associated with an issue with your land title. For example, when you buy land, there are pegs showing the location of your boundary. If a truck was to knock them over and the builder cannot see where your land is prior to starting a build, they will charge you $1000 per peg to re-site them. Ridiculous right?! This insurance protects you from that and much more. It cost us $300.


6. Fences

If you’re like us and building a house, make sure you budget for fences to be installed on the boundary of your property. Unless you are buying a ‘turn-key’ property (fences are generally included), then you will have to budget to pay for half the fence- your neighbour pays the other half. This can range from $1500 to $2500 depending on the size of the property and the fence which is required as per the design guidelines (if building in an estate).


7. Council Rates

Ahh we got this delightful bill last week. Let me tell you, being hit with an unexpected $2,000 bill is not a fun experience. Council rates cover water servicing, rubbish bins, collection of rubbish and general maintenance of public areas. We knew we would have to pay this eventually, it’s just that we weren’t expecting it until we moved in. One positive, is we can pay monthly which makes it much easier and doesn’t take as much of a hit to our bank account.


8. Building 'Upgrades' which aren't actually upgrades at all

Have you ever heard of building a house without a floor? Well there are some (very well known) builders out there who will tell you that the price of one of their homes on display is $230,000 but OH, did we forget to mention- that comes without any flooring. Yep, the base price is meaningless and pretty soon, you're 'upgrading' the flooring and paying thousands of dollars extra just so you can have a liveable house when you move in. Basically, the base price means absolutely nothing. Add 75k+ extra and you'll have an idea of what you will spend on the build of the house.


9. Unforeseen extra building costs

This one hit us where it hurts. We were blissfully minding our own business one day when we received an email, saying that for an unknown reason the power to the building site had stopped working. This fun fact meant that  “as per our contract”, we had to pay $250 per day for a generator until the power came back on. That drained us of $500- that better have been damn good electricity.


10. Bushfire Attack Level

This was something I had never heard of before but ever since the 2011 Black Saturday Bushfires, the government has brought in a rating system which requires new-build houses in “higher risk areas” for bushfires, to pay for additional items which in essence, protects the house more from a fire. Some of the requirements were: A whirly-bird on the roof (what the?), Sarking to the roof (what the?) and other random things which added $4,500 to our build cost. Luckily, our rating was downgraded right before the build started which meant that we don’t have to get burned by that extra cost (yes, bad pun. No, not sorry).



Apologies, this list looks a little bit scary now that I have written it- I SWEAR ITS ALL STILL WORTH IT!! Now go, prosper and get to Aldi to buy a cheap-as-chips bottle of vodka, take a shot and get saving.



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