Hidden Costs Associated With Building a New House

Building a new house can be quite costly, especially if there’re hidden costs you weren’t expecting. You can minimize such expenses when making a budget. Otherwise, you’ll end up paying more than you planned for.

Here are some costs you should budget for when planning to build your new home.

couple dreaming about building their new house in sydney

Land Registration

When buying a piece of land, you might get a land registration fee you weren’t expecting. The best thing to do is to ensure that the piece of land is recorded in the office dealing with land titles.

That way, you’ll find it easier to get building approval in readiness for the construction work to start.

Delays in land registration might result in extra costs during construction. Also, delays can cause the builder’s rate to go up.

Site Costs

Site costs amount to about $18,000 on average. Site costs are among the highest costs you’ll encounter when constructing a house. The overall cost may vary depending on your requirements and the nature of the land.

Contour and soil testing should be carried out to check whether the land is capable of supporting the house and the kind of site preparation work that’ll be carried out to make the site suitable for construction.

Professional builders include an estimate of site costs in their quote. However, the estimate may not include costs for works such as contour and soil testing.

Thus, you might pay more in case your land has issues such as a steep slope, rocky soil, shrubs, and tree logs.


Essentially, it costs more to build a house on a sloped land than a flat one. The cost is pushed higher by the work required to flatten the slope in preparation to lay the foundation. Generally, the cost increases with increasing slope.

On average, it costs about $6,000 extra per one-meter descent to build a house on sloped land. In case you’re dealing with a slope leaning sideways, expect to pay about $9,000 extra per one-meter drop.

The extra cost is often associated with hiring a specialist who’ll ensure that your home is strong and secure despite being built on sloped land.

Road Closure

There’re some fees associated with road closure when constructing a house. You may need to interrupt traffic or have a road closed to accommodate machinery or vehicles delivering supplies.

If road closure is applicable for your project, the estate government or local council will charge you a fee for all the inconvenience caused.

Check the appropriate fees involved in road closure for your site and include them in your budget.

Temporary Construction Site Requirements

You may spend a little more on temporary construction site preparation. It’s one of the main hidden costs as many people assume that it’s considered in the building contract.

Temporary requirements include costs for portable toilets, fencing, and temporary water and electrical connections that tradesmen require during the construction process.

Council Fees

Most people fail to account for council fees. These fees include the costs of obtaining a building permit, development application, service leave, filing, and archiving among other council fees.

Knowing these possible council fees will allow you to plan accordingly when making a budget.

Flood Prone Locality

In case the site you want to build your home is located in a locality prone to floods, you’ll incur extra costs to keep your home protected.

In this case, your house has to be built in a way that potential flooding won’t expose your household.

BAL Rating

BAL is an abbreviation for bushfire attack level. If you’re constructing a house in a bushy area or close to a bush, it’s likely that your home will get a specific BAL Rating.

In this case, your home should be built in a way that it’ll accommodate protection against bushfire. Your home will have to be built safely to resist bushfire. You’ll surely pay more for such high-level protection.


Many people fail to read the contract properly. The result is paying for unexpected costs.

For instance, modifications to the contract after it’s already signed can attract extra costs such as penalty clauses, legal fees, approval costs, drafting, labor, and engineering among others.

Modifications can include adding electrical points, changing the grout color, or any other variations.


Some builders fail to include the costs of flooring in their quote. Unless you’re dealing with a turnkey package, you may run out of finances by the time you want to do the final touches.

It’s advisable to include the costs of installing tiles, floorboards, vinyl, and carpet among other flooring materials when budgeting. Set aside sufficient funding for these expenses.

Alternatively, avoid this hidden expense altogether by working with a builder who offers turnkey packages. The package will include installing the flooring.

Wall Tiles

The cost of installing wall tiles is approximately $50 for every square meter. While wall tiles might be included in the proposal, the height they’ll reach should be outlined clearly.

Your builder can assist in identifying their best height in wet spaces such as the bathroom and toilet.

If you’re planning to install tiles along the entire height of bathroom walls, ensure you plan for it with the builder prior to signing the contract. Otherwise, it’ll cost you more than what you budgeted for.


In most cases, the builder’s estimate only considers the costs associated with the house alone and not its surroundings. In case you need landscaping work done, you’ll end up paying more than what you budgeted for.

Landscaping projects can be quite expensive. You can hire a professional landscaper to do the work for you or save money by doing it yourself. Landscaping may also include working on the driveways and fencing the compound.


In most cases, driveways are done as an afterthought when you’ve already built your house. Typically, the estimate for the construction only includes building your house and leaves out outdoor details such as driveways and walkways.

On average, doing a concrete driveway on a flat surface costs about $1170. However, the final cost will depend on the style and type of the driveway and the area that the driveway will cover.


The Building Sustainability Index (BASIX) outlines regulations for building sustainable residential properties across NSW. These requirements ensure that a home is built to be more sustainable and environment-friendly.

Set aside some money to ensure that your home meets BASIX regulations. It costs about $8,000 to $10,000 to meet BASIX regulations.

It could even mean adding something more affordable like a large water tank to harvest rainwater.

Electrical Provisions

If your builder skimps out on some power points and lights, then you’ll end up paying more than you planned for. For instance, they may have only quoted one power point and light per room.

Thus, check the contract keenly before signing it to ascertain that they have quoted the number of power points and lights you want each room to have for sufficient lighting and power outlets.

You can avoid this unexpected cost by establishing electrical requirements early enough.

Bathroom Accessories

If there’s something that can enhance or destroy your space, it’s bathroom accessories. The bathroom requires finishes such as mirrors, towel rails, and toilet paper roll holders among others.

Costs for these accessories are often hidden. It’s important to ensure that these bathroom accessories are quoted in the contract. Also, ensure they’re of the standard you’re expecting.

If you prefer matching bathroom accessories, talk to your builder about it so that they can include them in the quote instead of incurring extra costs of doing modifications.

Outdoor Provisions

You may want to use some utilities such as gas or water in the outdoor area. In this case, ask your builder whether they’ve included expenses for these provisions.

Talk with the builder about your needs and ensure they include all the outdoor provisions you require.

Rushing to add a gas or tap connection at the last minute may cost you more than you expected. Thus, have these expenses in your budget.

Provisional Sums and Prime Costs

Provisional sums refer to estimated costs for doing a specific task, service, or for supplying materials. While these costs are quoted, the final price can’t be established yet.

Thus, take note of provisional sums as you may end up paying more than stated in the contract.

On the other hand, prime costs may change during the construction process. Thus, they’re only quoted as an estimate.

Prime costs may change due to changes involving the accessories and finishes you want. For instance, you’ll pay more to have something more luxurious than what was quoted.

Covenants and Overlays

There may be some estate covenants or council overlays that need to be followed. It’s important to take note of them as they may affect your home’s construction.

Some common covenants and overlays that can cost you more include:

  • Characteristics: Some local councils outline specifications that should be followed when building a house. For instance, there may be specifications on the appearance of the side of your home facing the street.


  • Acoustics: If the site is located close to an airport, busy roads, arterial routes, and train lines, your home will require additions for noise reduction. For instance, installing insulating walls and double glazing to reduce noise will cost you more.

Wheelie Bins

While this isn’t part of the main construction work, you’ll need sufficient wheelie bins for getting rid of rubbish.

The bins may cost you some hundred dollars depending on your location and requirements. The last thing you’d want is to run out of cash and you don’t have anywhere to take your waste.

By knowing the potential hidden costs involved in building a new house, you’ll find it easier to create a budget that will ensure the constriction process is completed successfully without running out of cash.

Remember to create a buffer for extras that might come up in the course of the constriction. A good buffer should be about 10 percent of the overall quoted cost.

Tips for Creating a Budget

Building a new home is often costly. Thus, it’s important to learn how to cut costs on your budget without affecting the quality of the work.

Here’re some tips that can assist you to reduce costs when making a budget for the construction:

  • Start early: Start everything early to give you time to make any changes and get an extra source of income or financing if necessary.


  • Choose a good piece of land: If possible, choose a piece of land with minimal vegetation and slope. This will assist in reducing the costs of site preparation.


  • Buy land that’s ready for construction: Doing so will also cut down the costs of site preparation.


  • Choose from simple floor plans: Simple floor plans such as squares and rectangles are less costly to build than more complex shapes such as triangles or custom plans. Custom floor plans will cost you more in terms of materials and labor.


  • Plan for the interior design: Plan for interior design details such as floors, paints, colors, and cabinets among other finishes. That way, you’ll reduce unexpected expenses and budget accordingly.


  • Try to compromise: You can compromise on some fittings, standards, and materials to reduce the budget to a figure you can afford. After all, you can swap some items later on when your finances allow.

Frequently Asked Questions

What’s cheaper between building and buying a home?

Essentially, it’s cheaper to construct smaller houses since they only require a few materials and labor.

If you prefer owning a bigger house, probably one with at least three bedrooms, consider the estimated cost of building one versus buying an already built house and the estimated cost of making changes or repairs in an already built house.

Here, your choice should be based on this comparison and your preferences.


Is it possible to reduce the cost of construction? If possible, how will I do it?

Yes, it’s possible. You can reduce the cost of constructing a new home by following these tips:

  • Check the contract keenly and ensure all your requirements are covered before signing it. Ensuring everything is done right before signing the contract will save you from the costs of doing alterations later on.


  • When designing, use standard measurements and lengths for materials. Doing so will reduce labor costs and costs of materials due to minimal waste.


  • In case you want a more spacious house, avoid going upward. Instead, go outward. It’ll cost more to build a 2-story house when compared to a bigger single floor plan. Nevertheless, if you must build a multi-story house, consider using weatherboards rather than bricks to cut the costs.


  • Preferably, use a standard design rather than a custom one. Since houses based on standard designs have been constructed severally, the builder knows how to complete the house more quickly.


  • A simple roof will also cut costs. Simple ridge-line roofing with shallow pitches is more affordable to build than those featuring varying sizes with steeper pitches.


  • In case you want to have a spa bathroom but you can’t afford it at the moment, consider installing a tub that’s as large as the kind of jetted tub you desired to build. That way, you’ll save a lot and still build something you’ll like.
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