Budgeting for a new home might seem straightforward, but most Aussies end up spending more than they planned. Surveys show that the majority of people blow their build budget, often due to sneaky costs that crop up along the way.
The Australian Bureau of Statistics has found the average cost of building a home in Australia has risen by $100,000 in the past 4 years. So, how can you avoid unwanted financial stress?
We’ve created a comprehensive list of all of the hidden home construction expenses to be aware of before signing a contract. From approval fees to site costs and finishing touches, make sure you budget for all of these factors before you build.
Land & Legal Costs
Stamp Duty
1 . Stamp duty – Also known as transfer duty, this tax is the biggest hidden cost of building. The rate depends on the property’s value and it must be paid within a few months of signing a contract of sale.
Land Registration & Mortgage-Related Fees
2. Land registration fee – This is the fee for officially recording a property’s ownership transfer or mortgage on the property title. The rate will vary depending on which state you are in.
3. Mortgage registration fee – This is a government fee to register a mortgage on a property’s title. It is necessary to record the lender’s legal interest in the property.
4. Loan application fee – When you make a home loan application, your lender will charge you a one-off fee to process your application. As it can range from $200-$800, it pays to shop around.
5. Lender’s mortgage insurance – If your deposit is less than 20% of the home’s value, your lender will take out LMI to cover their costs should you default on your loan.
6. Lender’s property valuation – If you are taking out a home loan, your lender may insist on assessing the market value of the property to ensure they can recover their funds should you default on your loan. While this is often covered by the lender, the cost may be passed onto the borrower.
Legal & Advisory Services
7. Legal fees – Conveyancing is the legal process of transferring property ownership and conducting essential searches and reviewing building contracts. You can expect it to set you back from $1000-$3000.
8. Building Inspection – Even though the home will have been inspected during the construction process to ensure compliance with regulations, an inspection to assess the quality of workmanship is often necessary.
9. Drafting fees – While some builders have an in-house architectural team, others don’t and you will have to pay the cost of detailed drawings for construction, which can range from several to many thousands of dollars.
Site Preparation & Planning Costs
Site Costs
10. Clearing and levelling – Preparing your block for building includes demolishing existing structures, removing vegetation and levelling the ground and adding drainage. Unexpected issues like rocky soil may lead to additional costs.
11. Temporary fencing – Temporary fencing is required by law to ensure the safety and security of the public. It also prevents unauthorised access to the building site.
12. Temporary power and water – Your builders will need to use power tools and other electrical equipment and have adequate lighting during the construction process. Therefore, temporary electricity connections are essential.
13. Portable toilets – This is one of those unexpected expenses that it’s easy to forget when budgeting for building costs. However, you’re legally required to provide toilet facilities for workers. Generally, 1 toilet per 15 workers is the standard.
14. Bin hire and waste management – A significant amount of waste is generated during a new home build, so skip bins are required to help your builders manage unwanted building materials.
15. Tree protection – Local councils have specific requirements for tree protection, including tree protection zones. If you don’t comply, you can be fined, so always check the requirements with your local council.
16. Road closure – If you need to close off part of the street to bring in heavy equipment or deliver materials using a crane, you will need the necessary permits from the council and potentially local police. You may also have to develop a traffic management plan and pay for traffic controllers.
Surveys & Assessments
17. Soil test – Whether your home is built on a concrete slab or other footings, you’ll need a soil test to determine the foundation design. Do this as early as possible because unstable soil types may require deeper footings, leading to additional costs.
18. Boundary and contour survey – A site survey is necessary for compliance and to ensure the correct boundaries. In most cases, the local council will insist that one is conducted before building approval is granted.
19. Dilapidation report – Again, council requirements may dictate that you need a report outlining the condition of surrounding buildings before construction can begin. This also protects you if disputes arise over damage.
20. Engineering fees – Before the building process begins, you will need to pay an engineer to assess your foundation, any retaining walls and sometimes, drainage plans.
Council Fees
21. Development application fee – These are council fees to assess your initial plans to ensure they comply with local planning regulations. Check with your builder or local council for tailored advice.
22. Construction certificate fees – This fee covers the council’s assessment of your plans to ensure they meet building codes and standards.
Environmental Compliance
23. BASIX certificate – The NSW state government has mandated minimum standards for sustainability. This means you will require a BASIX certificate to ensure your new home meets these standards. The base price starts at around $200, but it will vary depending on the size and complexity of your project.
24. Bushfire Attack Level (BAL) assessment – If you are building a house in a bushfire-prone area (near a national park, for example), you’ll need an assessment to determine building requirements, including materials and design features.
25. Flood risk requirements – If you are building a house in a flood-prone area, you’ll likely be required to present a Flood Management Report from an engineer or at the very least, demonstrate compliance with council requirements.
26. Pest control treatments – In NSW, new homes need a termite risk management system in place as part of the Building Code of Australia. This can be either a physical or chemical treatment, depending on the determined risk of attack.
Building-Related Costs
Prime Costs & Provisional Sums
27. Allowance blow-outs – In construction contracts, prime costs are allowances for things like fixtures, where the price is yet to be determined. A provisional sum is an allowance for services that aren’t fully detailed, like landscaping. If not carefully managed, the cost of these can quickly blow out.
Finishes and Fixtures
28. Fixtures and fittings – It’s very likely that premium taps, sinks or lighting options are not included in the final price of your home. If you want to upgrade to anything other than the basic options, you’ll have to pay more.
29. Flooring – Carpet and vinyl flooring are common inclusions, but if you want to opt for something more hard-wearing, this will add to the total cost. In fact, sometimes flooring is not included in the overall cost at all, so beware of this before you sign a contract.
30. Appliances – The same goes for appliances. Always check if they are inclusions and if you want to upgrade, expect to pay a premium for the privilege.
31. Cabinetry and benchtops – Materials like laminate benchtops and cabinetry are often included in the base price, but if you want anything beyond this for your dream home, you’ll have to pay extra.
32. Utility Connection Fees – From installing water meters to hooking up NBN, these unexpected costs are often not included in building contracts, so be on the lookout for them.
33. Electrical upgrades – Adding extra electrical points, lights or data cabling are additional expenses that many people forget to add to the cost of building a house, but don’t want to live without when it comes to the end of the build.
34. Window treatments – Among the many hidden costs of building a house are the price of things like curtains, blinds and screens. These can be a substantial cost, but it’s usually the case that you have to purchase them yourself.
35. Closet organisation – Standard wardrobes usually only feature hanging rods and shelves. Expect to have to pay for better systems to store your clothes.
External Works
Driveways, Landscaping, and Fencing
36. Landscaping – Landscaping and turf are often excluded from builder quotes, but without it, your home won’t look finished.
37. Driveways – Even if you’ve thought to build somewhere to accommodate vehicles, you need to make sure you can actually access it.
38. Garden paths – Since builders don’t normally take care of the landscaping or driveways, be sure to organise a separate contractor to build a path to your front door.
39. Fences – Fences are very expensive, even when the cost is shared with neighbours.
40. Letterbox and house numbers – There would be nothing worse than moving into your new home and your family and friends (or your Uber Eats driver) not being able to find you.
41. Security screens and doors – Very essential but easy to overlook. Unless you want just anyone (or anything) wandering into your home, you’ll need to have a security door fitted to the front of your home.
42. Final cleaning – Even though it’s ‘new’, your home will require a good clean by a professional before it’s fit for you to move into.
43. Outdoor features – Don’t forget to factor in the cost of a lawnmower to keep your new home looking great and a shed to put it in!
Construction Timing & Builder Clauses
Builder Promotions
44. ‘Free’ upgrades – If it’s too good to be true, it probably is. Look carefully into free upgrade packages because there may be extra costs or restrictions, like the choice of materials or installation timelines.
Changes & Modifications
45. Variation fees – Once you sign a contract, any modifications like moving walls or changing your mind about materials can come with expensive variation fees.
46. Material price increases – While having a fixed-price contract may help you to some extent, if the costs of materials like timber or steel rise significantly, some builders will pass on these costs.
Construction Delays
47. Moving costs or extra rent – Construction delays are very common, so don’t forget to factor in the cost of having to move from one rental home to another, or extend your lease, if your project happens to go over time.
48. Labour costs – Construction delays often mean that tradespeople are required to stay on site for longer, and therefore, cost more.
49. Equipment rental – Builders normally rent larger pieces of equipment, like heavy machinery or concrete mixers, so any time issues will mean extra costs here.
50. Loan interest – Construction delays mean that any loans used to fund construction are accruing interest at the same time you are paying for alternative accommodation.
Why Hidden Costs Are So Common
Hidden costs are common because initial quotes often cover only the basics, leaving out key extras like site preparation, landscaping, or council fees. These “optional” costs are frequently buried in the fine print of contracts, catching homeowners off guard once construction begins and pushing final costs well beyond the original estimate.
How to Avoid Budget Blowouts
Avoiding budget blow-outs comes down to three main steps. Managing the size of your build, managing time effectively and minimising design changes.
Here are some of the best ways to avoid overspending.
- Plan the look of your home extensively from the beginning so that you have time to shop around and have materials ordered early.
- Spend where it matters most. Livability is more important than the ‘what ifs’.
- Find a builder that’s big enough to put manpower into your project but small enough so that you won’t just be another address.
- Stay in constant communication with your builder at every stage of the process.
- A 20% contingency budget is more realistic than 10%.
- Make sure your quote is fully itemised and review provisional sums carefully.
Simplify Your Home-Building Journey With Vision Homes
Building a home can be a stressful time, especially if you’re not well prepared. However, by being aware of all of the hidden expenses involved and by planning for all scenarios, you can ensure your project runs smoothly.
At Vision Homes, we pride ourselves on our clear and open communication. When you work with us, you can have peace of mind that we’re here to answer any questions you may have and help you navigate complex processes.
If you’re keen to minimise hidden costs and streamline the process of building a home, visit the Vision Homes website to see our great value house and land packages, or contact us today to learn more about how you can save money when you build with us.
Frequently Asked Questions
What is the most expensive part of a new home build?
The most expensive part of a new home build is generally the cost of land, which can account for up to 50% of total costs. Although this varies depending on whether you are buying and building in an urban or rural area, and the size, complexity and materials costs of the build.
What are unforeseen costs in construction?
Unforeseen costs can arise at any stage of building a house and include things like unstable soil types, design changes, planning hurdles or weather delays.
What should I look out for when building a home?
You can run into many sorts of problems when building a home. These issues can see your budget quickly blow out. However, working with an experienced, reputable builder can help you save money and avoid many of those issues because they will ensure your budget is realistic, that the correct approvals have been sought and that the project stays on schedule.