What to allow for in your build budget

Jun 17, 2019

home building budget

For most people, building a new home is the single largest financial investment they will ever make. And given the fact that they will likely only do it once, it’s understandable that decisions about budget and inclusions weigh heavily on their mind.

Finance is a sensitive issue, and one that should be spoken about with complete honesty and transparency between a builder and their client.

Once a building contract is signed and the bank has given their stamp of approval, it can be difficult to add to the inclusions list unless the client has the personal budget to cover it. Banks rarely alter approved lending schedules to cater for variations.

You should understand the scope of inclusions right from the start. Conflict can arise in situations where clients assume services are included in the contract when they’re not – and it can cause personal and financial strain if the client needs to pay for unexpected additions out of their own pocket.

Below is a list of inclusions that may or may not be part of your building contract.

Before you sign, check to see if they are so you can either negotiate to add them in or make personal budget allowances to cover them…

  • Design fees (architect/architectural designer/interior designer)
  • Design consultants (surveyor, geotechnical and structural engineers, tree surgeon, energy assessor, hydraulic engineer, landscape architect)
  • Approval fees (developer and building approvals, certifications, home warranty insurance)
  • Demolition (if required, including asbestos survey and removal, green waste removal, tree lopping and house demolition)
  • External works (driveway, paths, decking)
  • Landscaping (irrigation, soil preparation, planting, edging)
  • Utilities (new connection fees for electricity, gas, sewer, water, data)
  • Floor coverings
  • Window coverings

What should always be included in your building contract are the actual construction costs, including:

  • Setting up the site (fencing, portable toilets, environmental controls, access, craneage, scaffold and transport)
  • Build costs (materials and labour)
  • Rubbish removal
  • Final clearing
  • Project specific additions (required in some areas, such as mandatory solar panels, water tanks, bushfire controls, and so on)
  • GST
  • Builders fee (covering site supervision, admin, management and profit)

It’s also worth budgeting for contingencies, just in case incidentals pop up during the course of the build. Examples include design upgrades, difficulties in excavation, unexpected weather events and so on.

Most importantly, have an honest chat with your builder up front about your building contract so you’re clear about what’s included. If you do this, you maximise the chances of a stress-free, enjoyable build where you end up with a finished product that makes you truly happy.

For an honest chat about the cost of building a new home (or doing a knock down rebuild), please call Robert or Danny Rosin on 6247 4799 or email info@rosinbros.com.au.

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