Common Costs in the Home Building Process

 
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One of the most challenging things for owners is to work out the costs involved in their project. There are many stories around about construction costs going significantly over budget.

This need not be the case if the owner keeps a clear line of communication with the architect and builder about his/her needs, and also does some research about the current costs of materials on the market.

Below is a rough guide of what to allow for in your budget, when building or renovating a home.


Development Application Documents

This phase involves putting together the drawings for the design, as well as the relevant documents that Council requires for lodgement of a Development Application.

 

Apart from a set of drawings prepared by an architect, Council will usually ask for additional documents, such as:

  • A site survey to accurately detail the size, shape and levels of the land

  • A landscape plan prepared by a qualified landscape architect. 

  • A cost estimator must submit a detailed account of the cost of works for the project.

  • A Basix Certificate which contains details about how the dwelling/s will be environmentally efficient

  • A Statement of Environmental Effects prepared by a town planner, to write about the proposal in relation to its compliance with planning regulations.

  • A Heritage Impact Statement, if the site is located within a Heritage Conservation Zone

 
 
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Construction Certificate Documents

Additional drawings and documents will be required prior to the Construction Certificate being issued. Detailed drawings need to be prepared by the architect, in order for the project to be quoted accurately by builders, and contains relevant standards and codes that the work should adhere to. Other consultants include:

  • Structural engineering drawings prepared by an engineer

  • Stormwater drawings prepared by an engineer

  • A geotechnical report if the renovation is extensive, to confirm the strength of the soil on which it will be built

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Authorities

Numerous authorities are involved during the project. Development Application fees are usually the first of several costs, with Council charging based on the cost of works of the project. After DA approval, Council will charge a damage deposit prior to works starting.

 
 

OTHER FEES INCLUDE

  • Long Service Levy of 0.35% of the cost of works is payable when the cost of works is over $25k.

  • Private certifier fees: A certifier will be required to issue the Construction and Occupation Certificates.

  • Sydney Water approval is required to ensure the proposal doesn’t impact on Sydney Water’s assets.

  • Land Title office costs, if the site will be subdivided, or if an easement will be registered on the site

 
 
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Construction Fees

It is important to read the construction contract carefully, to ensure that everything required has been included in the quote, in order to avoid extra costs later down the line. At a minimum the contract should include: 

  • Insurances such as Home Warranty Insurance

  • Finishes: if finishes and fixtures haven’t been chosen at the time of signing the contract, a realistic allowance should be provided by the builder to allow the client to choose mid-range priced items

  • Contingency Costs: This provides room for additional unforeseen costs, and should be at least 10%, as price blow-outs on certain items do generally happen. 

  • Equipment hire: equipment such as excavators and scaffolding

  • Materials costs fluctuate periodically, a rule of thumb is to allow between 5-7% for inflation.

 
 

Taxes

GST is usually applied on top of existing charges. Read all contracts and quotes carefully to be sure. 

 
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5 Items That Increase Construction Costs