The hidden costs of building a house

When building a house for the first time there might be some fees you’re surprised about, especially if you’re only just starting your building journey.

As local Bundaberg home builders, we pride ourselves on quoting everything upfront and being completely transparent about the costs you should expect when building a house. Here are some of the ‘hidden’ costs you might not know about when building a new home. 

1. Site Preparation

Before the timber is cut and the render is ready, there’s a whole host of site preparation that must occur on your land. Depending on the site, this may include soil and contour testing, excavation, tree and debris removal, and more. This phase of the build also includes connecting services such as water and sewerage if they’re not already connected.

Generally speaking, your site preparation costs are included in the base price of your home. But, if your land is particularly sloped, needs a lot of extra excavation or encompasses rock, you could be in for a shock when you hear the additional fees. Keep costs down by choosing the clear, level, blocks of land where possible. If you know your builder before buying your land, get them to take a look prior to purchase to assess what site preparation may be required.

2. Stamp Duty, LMI and Council Rates

Something that’s completely out of your builder’s hands are the government and local council fees you must pay when building a house. These fees depend on a number of factors including:

• Whether this is your first home
• Whether you intend to live in the home or are building it as an investment
• How much of a deposit you have
• The value of the home you’re building
• Your overall financial position

If your deposit is less than 20%, you’ll likely have to pay Lender’s Mortgage Insurance (LMI) which helps cover your lender in the event you are unable to pay your mortgage. Next, think of Stamp Duty as a tax on the property's value. These two fees are usually mandatory for first-time home builders, although there are exemptions through certain First Home Buyer schemes. Talk to your lender or a financial advisor to make sure you understand all these fees and have an estimate for how much they might add to the cost of your home.

You should also be aware that council rates can apply not just once the house is complete, but from the moment you purchase your block of land. This varies depending on the value of your land, so again seek advice to make sure you’re covering all your bases.

3. Flooring

Many first-time home builders are shocked to discover that flooring usually isn’t included in a base home price. That’s right, if you’re looking at a “starting from…” or “build only” price, you’re going to be left with a concrete slab under your feet. Flooring usually isn’t included in base quotes because the price can vary drastically depending on the size of your home and what you’re after.

Do you want tiles throughout? Bedrooms carpeted? Laminate floorboards? Or traditional hardwood? All these options have drastically different rates, both for the materials' cost and the labour required to install them. Even within their separate categories, there can be huge differences in price – marble floor tiles, for example, come with a much heftier price tag than ceramic. Make sure you discuss floor options with your builder early in the process, so you know exactly what your options are, and what’s within your budget.

4. Landscaping

Another component of your home that may not be included in a standard quote is landscaping. Some builders may not offer this as a service at all, while others outsource it to a third party or do the bare minimum (i.e., grass and pavers). Once again, your landscaping costs will vary greatly depending on what you’re after. A simple pathway and a nice lawn might not cost too much – but as soon as you add trees, gardens, retaining walls, and speciality features, the price is sure to skyrocket.

A good way to keep costs down in your landscaping is to simply do parts of it yourself. Grabbing a few mates together to roll some turf will cost you much less than hiring a contractor to do it for you (provided you have a good idea of what you’re doing!). But, unless you’re a tradie yourself, it’s likely you’ll have to pay someone to do a lot of the outside work for you – either as part of your build or shortly after. Be sure to discuss all aspects of the outside of your home, including your driveway, pathways, lawn, gardens, entertainment areas, and fencing.

As local Bundaberg home builders, we've heard many stories of first-home builders who had their house build completed, only to then realise important aspects of landscaping weren't accounted for in the initial cost.

5. Late modifications

We’ve said it before, and we’ll say it again: late-stage modifications are costly! Builders understand that sometimes you might change your mind on a certain element of your house. Maybe you see a feature online you had never considered, or you were on the fence about something before and have decided to go the other way. Some of these changes are inevitable… but if you can avoid them, do!

Any changes to your home after you’ve signed a contract will incur an additional fee. You’ll need to cover the cost of new materials needing to be purchased, extra labour hours required, as well as the administrative costs of changing your house plans. Keep in mind that the bigger the changes, the bigger the cost. Avoid these fees completely by taking the time to really consider all your options, and make sure you’re 100% happy with your contract and house plans before signing.

Building a house is an expensive investment, but it’s one that’s worth it to own the home of your dreams. We’ll always try to give you the most competitive, upfront prices so you know exactly what you’re in for when it comes to your Bundaberg home. Contact us today to discuss starting rates for our homes, or book a consultation to talk through your custom home plan.