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7 Hidden Costs to Budget for Before Buying a Home

Many first-home buyers are surprised by the one-off costs of applying for a home and the ongoing costs of living in one.
By · July 31, 2022
7 Hidden Costs to Budget for Before Buying a Home

Many first-home buyers are surprised by the one-off costs of applying for a home and the ongoing costs of living in one. 

Before buying a home, ensure you’ve budgeted for the following expenses.

Building reports

In New Zealand, you don’t have to apply for a building report before putting an offer in on a home. However, it’s always a good idea to know what work has been completed so you know the home's condition.

A building report is performed by a qualified builder and looks for signs of any problems. While it’s tempting to skip this step, there are many advantages of paying for a builders report:

  • Avoid buying a home that isn’t up to code. Some types of extensions, decks or add-ons require consent from the local council.

  • Negotiating power. If work needs doing, you may be able to negotiate money off the property's price.

  • Prioritise your budget. A building report lets you factor in upgrades or work that you’ll need to complete in the future.

Building reports cost between $450 and $1,200. Needless to say, if you’re looking at multiple properties, these expenses can add up quickly.

Lawyer or conveyancer fees

Buying a home involves a lot of paperwork. A lawyer or conveyancer can help clarify your legal rights and obligations when purchasing a home. They can look at the title of your property, let you know where the legal boundaries of your home are and will have access to information about your rights and any restrictions on the property.

They can review the auction contract on your behalf if you’re considering buying a house at auction.

Budgeting around $3,000 in legal fees when purchasing property is a good idea. Buying a new build or building from scratch will involve more paperwork and cost more.

LIM report

Before you purchase your home, you’ll need a copy of your property’s Land Information Memorandum. Your LIM report (as it’s known) summarises your property’s information, including rates, consent for work done on the property, and any land issues or events such as past flooding.

Property owners can add to their LIMs over time. If the seller or a real estate agent offers you a copy, ensure it’s up to date. Otherwise, you could be overlooking any potential problems with the property.

You’ll need to budget about $300-$400 for a LIM report. While you’re getting a copy from your local council, ask to see the council file on your property. This may contain extra information that isn’t in the LIM report.

Mortgage rates

Most people know to estimate their mortgage before they buy a home. However, it’s always a good idea to make sure you can afford the repayments if the interest rates on your home increase.

Interest rates are currently sitting at around 5.95%. However, these lower rates are for six-month or one-year mortgages. Make sure you can afford the payments if your rates go as high as 7%.

Council rates

Council rates are one ongoing expense you’ll have to get used to when you become a homeowner. In New Zealand, these fees vary depending on where you live. Your local council will have information on how much the rates are for each area of the city you plan on living in.

You must factor this cost into your monthly budget. The average annual residential rate in New Zealand is $2,572 or $233 a month. This might not sound like a lot, but keep in mind you might also have other monthly expenses like insurance, maintenance and renovations to pay for.

Body corporate

If you’re buying an apartment in New Zealand, you’ll have to pay body corporate fees. These fees go towards maintaining and upgrading the shared areas of your apartment building and the exterior facades of your complex.

Many apartments charge these fees quarterly. You’ll need to find out what your annual fee is and factor this into your monthly budget. Unfortunately, your body corporate fees won’t cover all maintenance, and you may also have to pay for unforeseen expenses. Before buying an apartment, request the recent body corporate minutes. These will help you get an idea of any ongoing issues.


New Zealand is an island nation positioned on two shifting tectonic plates. Therefore home insurance should be a given. Even so, many people fail to budget for insurance or are surprised at how expensive insurance on your home and contents can be.

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To keep expenses down, shop around for insurance from several places. You can also get a better deal on your insurance by using a mortgage and insurance broker. These brokers can package a lot of your expenses together and get you a better deal than what you might be able to find on your own.

Buying a home can be expensive. Keep your costs down by booking your move with Wise Move . Our moving companies are already making similar journeys giving you the best price options and keeping your delivery costs down.

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