More than ever, Australians entering the property market are looking to build and custom-design their own homes. Rather than purchasing an existing property, building can offer the opportunity to step into your own home for a more affordable price tag – as long as your planning is executed carefully and thoughtfully.
Government incentives are going a long way to make this choice even more alluring to First Home Buyers. However, if you haven’t done your homework, you could be in for a big surprise when it comes to all the extra hidden costs that can stack up when building your home.
Even when purchasing a home and land package, there can be unforeseen expenses that arise. We’ve put together a comprehensive list of hidden costs for you to consider when evaluating your home building budget.
1. Site Costs
Site costs can be a big shock. There are a range of influencing factors that help determine what your final site costs will be. One of the main influences is the size of your land, and the outcome of your soil and contour testing.
Other costly considerations are whether your block is located on a slope or if it has a lot of trees, shrubbery or rocks in the way. Preparing for a safe build can see costs mount up quickly.
Depending on your land requirements, site costs can vary between $10,000 and $70,000, with the average cost being about $18,000. Keep in mind, your builder may offer you an initial estimate, but this often doesn’t include things like soil and contour testing, so be prepared for the unexpected.
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If you stick to the plan outlined in the builder’s contract then modifications and variations won’t be an issue. However, when you deviate from the contract, you can run into additional expenses. These changes to the contract can incur legal costs, extra materials and labour costs, penalty clauses, engineering and drafting fees, and more.
Before you sign a contract with your builder, it’s best to go over the paperwork with a fine-tooth comb to know everything you’re getting. A change of mind down the track can cost you dearly.
When preparing quotes, many builders do not include costs like flooring. If you’re buying a turnkey house and land package flooring is often included. If not, you will need to factor in the expense of completing your home with something your feet will appreciate.
You’ll have plenty of choices to consider from tiles or carpet to floorboards or polished concrete. The prices will obviously vary depending on your preference and budget. Set aside at least $3,000 to $10,000 for your flooring. This is one of the reasons many home builders opt for turnkey packages.
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4. Driveways and Landscaping
Your builder will not usually quote for expenses that are not part of the actual house. Many first home builders don’t think about the extra costs of driveways and landscaping. Don’t worry, if you haven’t allowed for these expenses yet, in some cases they can be left until later if necessary.
When it comes to driveways, a concrete driveway can cost you as little as $1,500 or as much as $10,500. This will be determined by the size of your site, the style of driveway you desire, and so on. A standard 18m2 concrete driveway with materials and labour will generally be $1,500 to $3,500.
The average minimum cost for landscaping is $4,800, but if you’re keen to cut costs you can always put in some DIY love to get the job done without hurting the pocket book too much.
5. Temporary Site Requirements
Most people assume these costs are built into the building contract. However, you’ll often need to pay for temporary site requirements like portable toilets, temporary fencing, and electrical and water connections so the builders can get to work. Make sure to ask your builder about these requirements before signing the contract.
6. Fee for Road Closure or Causing Interruption
It may be necessary for your builder to interrupt traffic or close the road temporarily. Speak to your builder about this before work commences as you could end up with an unexpected bill from your local council or state government.
7. Land Registration
If you’re lucky, you may have a block of land that’s already subdivided and registered. If not, you will need to register your land with the land titles office, which incurs a fee.
Delayed registration can also cause extra expenses with your builder, and with new land there can be fees for connecting services like plumbing and sewage.
8. Building on a slope
When it comes to building on a slope, the general rule of thumb is that the bigger the hill the more it costs! You can expect to fork over at least $6,000 for every metre of fall on your property. If it’s a sideways slope, this can increase to $9,000 per metre of fall, and you may require a specialist builder.
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9. Bushfire Attack Level
Also referred to by its acronym, your BAL rating depends on how bushy your area is and how close it is to national parks or bushland. If your property comes with a BAL rating, this will affect parts of the build as you have to ensure it’s more bushfire safe. The costs for this type of build can be much higher.
10. Flood risk
Likewise, when your property is situated in a flood prone area, your home will need to be designed specifically so that if a 1 in 100 years flood were to occur, no one in the property would perish. In order to protect your home and your loved ones and comply with regulations, you will need to pay more for this design.
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If you’re building in NSW, the state government requires your new build to comply with their regulations (BASIX). This fee is intended to ensure your property is built more sustainably, and can include features such as water tanks on your property. You can expect to pay between $8,000 and $10,000.
12. Council Fees
Council fees that many people aren’t aware of can include:
- Approvals and development application fees
- Construction certificate fee
- Archiving and filing fees
13. Wheelie Bins
An overlooked expense that isn’t part of your build, nonetheless you will need to pay for your wheelie bins for rubbish collection! The fee will depend on where you live so have a chat with your local council. They’re usually between $300 and $600.
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14. Prime Costs and Provisional Sums
Your prime costs are an estimate at the time of quote and are subject to change. Cost variations occur when you decide on changes to finishings or accessories. The prime costs a builder allows for is usually something quite generic or simple, so if you want to upgrade to fancier options your budget could blow out.
A provisional sum is given when the builder cannot yet establish the final price for a certain task, service or product. Ensure you arm yourself with the knowledge of the hidden costs you may find on top of what your contract outlines.
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15. Wall Tiling
The wall tiles in your bathroom or kitchen are often included in your proposal. However, you should make sure to check the height at which they are to be installed. If you haven’t stipulated wall to ceiling tiles for the bathroom with your builder before contracts are signed, you may find yourself out of pocket a lot more later. Wall tiles can set you back roughly $50 per square metre.
16. Bathroom Accessories
Bathrooms should be the oasis in your home, and you’ll want them finished appropriately. Hidden expenses can include:
- Towel rails
- Toilet roll holders
Cover these with your builder in the contract and if you want upgraded accessories discuss this initially so that you don’t incur modification costs.
17. Electrical Fittings
This is another area where you need to check over your contract thoroughly before you sign. Your builder may be quoting for a single light, switch and powerpoint in each room. Carefully consider your lighting and power needs and outline this with your builder early on in the process.
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18. Outdoor Provisions
Are you going to need outdoor utilities like gas connections, or taps? Ask your builder if their estimate includes these provisions and find out exactly what is included. Decide first what you will need to avoid contract alterations down the track.
19. Overlays and Covenants
Your council may require you to follow their overlays or estate covenants, and this can affect the way you build your home and the costs associated.
The characteristics of the home may be an area your local council outlines, and they will be clear about what types of facade are acceptable for your home.
The other requirement could be acoustics. This comes into play when you’re building on busy roads or close to railway stations, and you will need noise reduction upgrades, such as insulation and double glazing.
Words by Katy Holliday
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