It pays to be aware of unexpected building costs so you can budget for the construction of your new home – and complete it with your finances intact.
When building your first home, you may think you’ve got the budget sorted – labour, materials, permits, land registration and site costs. However, there are other legalities which have probably never crossed your mind. And just because the display home is dressed to the nines, don’t assume your home will come with those electric blinds or that retro Smeg fridge you fell in love with.
To help you stay within budget, here are nine unexpected building costs you may need to plan for:
1. Soil tests
Most councils require your builder to conduct a soil test. This determines how much the soil expands and shrinks with changes in moisture content, which can impact your home’s foundations. Your builder will then need to design your home’s footings to ensure they cope with the type of soil and possible movement.
2. A contour survey
A contour survey shows the elevation, or changes in height, of your land at various points. The flatter the land, the easier and cheaper it is to build on. Sloping sites may offer the potential for great views, but they can be more expensive to build on. A significant slope can also call for the involvement of an architect and specialist building teams, which can send the cost soaring.
3. Sustainability features
In states like New South Wales, home builders are required to obtain a BASIX certificate, which assesses the sustainability of a home’s design.
Even in areas where this isn’t essential, adding environmentally-friendly features like solar panels, water tanks and thermal insulation can be a good idea. They may add to the initial cost but reducing your home’s eco-footprint can lower utility bills, and potentially enhance your home’s market value.
4. Landscaping and driveways
Be very sure to read your building contract carefully to understand exactly what you’re buying. It can come as a surprise to find your finished home doesn’t come with landscaping, paths, a driveway or even a mailbox – extras that can quickly add up.
5. Upgrades
The base price of a home will often include base-level finishes. If you want better quality carpets, tiles, kitchen benches and other finishes, you must be prepared to pay more.
6. Modifications
Even minor modifications to a builder’s plans can see the home’s list price fly out the window – more so if it means major structural changes.
The real hit to your hip pocket can come if you alter the plans mid-way through construction. The key is to be comfortable with how your home will look and feel before works commence.
7. Appliances
Be sure to check if any appliances are included in the cost of your home. Some, like a refrigerator and washing machine, almost certainly won’t be. That’s not a problem if you already have these appliances but check that they’ll fit the space provided in your new home.
8. Creature comforts
Check if curtains, blinds and other soft furnishings are included in your home’s construction costs. Where they’re not, it’s important to allow for what can be a sizeable expense.
9. Delays
Hold-ups with materials and wet weather are common reasons for building work to take longer than expected. This may not alter the cost of your home but it can impact your budget if you’re renting while your new place is under construction. It makes sense to plan for this by allowing some wiggle room for delays in your budget.
By making allowance in your building budget for a range of hidden costs, you should sail through the construction process and settle down to enjoying your brand new home with your finances in good shape.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.