Everyday Money guide
Investment Property Buying and Selling Costs Australia
Include acquisition and exit costs when calculating total property ROI.
Updated 16 October 2026 • Reviewed by Tools by Layna Editorial Team • General information only
Why this decision is easy to misread
Property returns are often quoted from purchase price to sale price, as though the transaction were free. Buying costs increase the investor’s starting cash, while selling costs reduce the amount recovered at exit.
These costs have a large effect on short holding periods because they are spread across fewer years of rent and growth.
The calculation, step by step
Transfer duty
Varies by state, value, purchaser and concessions.
In the calculator, this item should be entered separately so a change in transfer duty can be tested without hiding it inside another assumption.
Legal and inspections
Conveyancing, searches, building and pest work.
In the calculator, this item should be entered separately so a change in legal and inspections can be tested without hiding it inside another assumption.
Finance setup
Valuation, application, settlement and LMI where relevant.
In the calculator, this item should be entered separately so a change in finance setup can be tested without hiding it inside another assumption.
Initial work
Repairs, appliances, compliance and furnishing before rent.
In the calculator, this item should be entered separately so a change in initial work can be tested without hiding it inside another assumption.
Agent commission
Usually a percentage of sale price.
In the calculator, this item should be entered separately so a change in agent commission can be tested without hiding it inside another assumption.
Marketing and legal exit
Photography, advertising, auction, styling, conveyancing and loan discharge.
In the calculator, this item should be entered separately so a change in marketing and legal exit can be tested without hiding it inside another assumption.
Capital gains tax
Personal and ownership-specific; not included in a general before-tax model.
In the calculator, this item should be entered separately so a change in capital gains tax can be tested without hiding it inside another assumption.
Worked Australian example
A $650,000 purchase with $30,000 of buying costs starts at $680,000 before interest and holding expenses. If sold for $800,000 with 2.2% commission and $5,000 fixed selling costs, more than $22,000 disappears at exit before loan payout or tax.
The headline $150,000 price increase is therefore not the investor’s profit.
Decision checklist
| Step | What to confirm |
|---|---|
| 1 | Obtain state-specific duty estimates. |
| 2 | Include initial repairs in cash invested. |
| 3 | Model agent commission on future sale price. |
| 4 | Add fixed marketing and legal costs. |
| 5 | Use net sale proceeds in ROI. |
Use the calculator with this guide
Common mistakes
- Using purchase price as total acquisition cost.
- Ignoring LMI.
- Applying commission to purchase price instead of sale price.
- Forgetting loan discharge and legal fees.
- Calling capital growth profit before tax and costs.
Questions to answer before acting
- Obtain state-specific duty estimates.
- Include initial repairs in cash invested.
- Model agent commission on future sale price.
- Add fixed marketing and legal costs.
- Use net sale proceeds in ROI.
Record keeping and review
For this calculation, retain the evidence behind transfer duty and legal and inspections.
Official sources
Related guides
Frequently asked questions
Does stamp duty count in ROI?
Yes, it increases initial cash invested even though it does not improve rent.
Should selling commission be estimated now?
Yes, using a reasonable rate and future sale value.
Is CGT included?
Not in the general calculator because ownership and tax circumstances differ.
Can buying costs be borrowed?
Sometimes some costs are financed, but cash and loan effects should still be shown.
Why do short holds need more growth?
Transaction costs consume a larger share of returns over fewer years.
Bottom line
Total ROI begins with all cash paid to acquire and ends with net cash received after selling—not the two property prices alone.