So...basically, we want to buy a particular property we have fallen in love with, and we'd need to sell our own property in order to do it. And even then, we don't hold out much hope as the new property is more expensive than the price we expect we could get for our own property.
Anyway, my question is...I just want to make sure I'm correct here, but...just for example you own a property and you achieve a sale of $340,000.
This is NOT actually what you get, is it? You then pay about $9,050 in agent's commission (in QLD it's 5% for the first $18,000 and then 2.5% on the remaining balance, plus GST), and legals (though that's not much).
So what you actually end up with is more like $330,000.
And then say the property you want to BUY is also $340,000...that's not what you actually pay, is it?
You then add on about $10,440 in stamp duty and also the legals, so what you're paying is more like $353,000.
So suddenly there is this $20,000+ discrepancy even when on face value, the 2 properties are the SAME value!?
Is this right or am I completely lost here? lol
It's not so much that you lose money because generally you are getting a better property upgrading, but if you are only looking at the $$$ figure & not anything else then yes you are losing money.
pretty much as you described.....
fees in selling and taxes and duties in buying.
You are correct. It cost you to sell and it costs you to buy!!!!
Agent's commission in Victoria are more negotiable than what you quoted for Queensland but maybe that includes advertising costs. In my area at least, agents charge a percentage (anywhere from 1% to around 3.5% but then charge all the extras for advertising, e.g. internet listing, professional photos, newspaper listings, sign boards, etc. separately.
I wont say your "losing money"- but rather your PAYING for a service and your tax.
Service - the agent
Tax - Stamp duty.
So really if you can find a buyer without a agent; or negotiate for a lower % on the commission it may work out....but the tax you can't avoid unless your entitled to some concession
Also not to burst your bubble; depending on the original use of the property and age etc - CGT may be payable.
Regards
Michael
It sucks hey. And to top it off, if it's a buyers market it's usually not a seller's. So in other words, you may get the new house at a good price, but someone will with yours as well as it's value may have decreased due to the market (such as ours atm!!). So then you are losing money again!
Is this right or am I completely lost here? lol
You are completely right!
Don't forget other costs such as removalists, your time looking for property, selling property, packing and unpacking.
and don't forget....how much did you pay for the house you are selling for ($340,000) when you purchased it years ago ! $200,000 maybe ?
and don't forget....how much did you pay for the house you are selling for ($340,000) when you purchased it years ago ! $200,000 maybe ?
and don't forget....how much you would pay for the house you are buying for ($510,000) when you could have purchased it years ago ! $300,000 maybe ?
Just as well you are not in Victoria. We pay the highest stamp duty in the country. I recently bought and sold and was out of pocket 50k including the ridiculous stamp duty cost of 34k. It forces people to stay put in less than ideal situations because the cost to move on is so prohibitive. Every time I move to a new house I loose a chunk of my equity on stamp duty (which is the greatest government rip off there is). Makes you want to rent - cost of moving as a tenant is removalists only...
and don't forget....how much did you pay for the house you are selling for ($340,000) when you purchased it years ago ! $200,000 maybe ?
HAH! I wish! We paid $337,000 in mid 2008. lol
But yeah. We already included moving costs, depreciation / market issues, in our financial outlook. I just wanted to make sure I wasn't totally missing something in terms of the fees (stamp duty) and costs (agent commission and advertising).
It just seems a lot, but I suppose compared to the amount you get from the sale, it's just a fraction.
Just as well you are not in Victoria. We pay the highest stamp duty in the country. I recently bought and sold and was out of pocket 50k including the ridiculous stamp duty cost of 34k. It forces people to stay put in less than ideal situations because the cost to move on is so prohibitive. Every time I move to a new house I loose a chunk of my equity on stamp duty (which is the greatest government rip off there is). Makes you want to rent - cost of moving as a tenant is removalists only...
WOAH! I knew VIC was high, but that just SUCKS! We thought QLD was bad now. When we bought our place in 2008, we hardly paid any stamp duty at all. We did pay SOME, as it was just before they took it away entirely for first home buyers, but it was only about $500 or something ridiculously low like that.
But THIS time, it’s all different. If we paid $350,000 for a place, we’d be losing an extra $9,000+ just in NOTHING! What is it FOR anyway? Who does it benefit (well, obviously I know that, but for what specific purpose does the government claim it’s used for?)