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First home buyer’s guide - Part 2: After settlement costs

After buying your first house there will be some costs to consider before settling in to your new home. Here’s a list of some of the fees you will need to bear in mind before moving in:

1.    Home Building Insurance

For peace of mind it’s best to insure your home against any rebuilding costs.

Home building insurance covers your house for any rebuilding or repairs to your home in case your house is damaged in an emergency.

Typically there are two types of home building insurance covers: Replacement and Indemnity insurance.

Replacement insurance basically restores your property to its former condition, while Indemnity cover repairs or restores your property to its current value, with depreciation taken into account.

2.    Removalist fees

Depending on where you’re relocating to, removalists’ costs can become an added expense that you may need to consider.

The fee you will be charged by the removalist will depend upon who’s doing the packing, how much furniture you have and the distance they will need to move your things.

3.    Council and Water Rates

During the settlement process, your settlement agent will advise your local council of your new house and lot ownership.

Council rates may be shared between you and seller during the settlement process and is worked out before transfer of ownership.

The rates will be calculated on a pro-rata basis and is divided between the amount of time that either party owned the property.  

Rates are a form of tax collected by local councils to fund their operations.  Their charges usually include fees for garbage collection services, water rates, municipal costs and a general rate that is calculated based on your property’s value.

The water rate bill charged by council is usually dependent on both your property’s value and the amount of water usage for your household.  

Each council uses different methods for calculating and charging rates, so some of the rates charges may vary depending on the value of your property and the council area where you live.

4.    Utilities and re-connections

It’s usually best to organise your electricity and phone connections before you move in.

Utilities including the phone, electricity, gas and the internet are usually disconnected once the ownership of the property changes hands.

You will be charged connection or re-connection fees to have these utilities in your home so it’s a good idea to have these organised just before moving in.

5.    Home decorating, fixtures and renovations

If you’ve bought a new home, chances are you won’t need to do any renovations or add many extras to your property.

Depending on the age and condition of your property, you should keep in mind that at some point you may want to set some money set aside for upgrading your house fixtures, home decorating or installing new gadgets for creature comforts.

If you want to get up to speed on all the steps involved in building a new home, including who’s responsible for what and the typical timeframes, download our No Suprises Building Book for a comprehensive guide to what you can expect as a first home buyer.