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By Greg Hankinson

Hidden Costs of Building a House in Australia

Building a house in Australia home can be an exciting experience, but it is important to be aware of the many unexpected hidden costs of when building a house in Australia that can add up throughout the construction process.

From the building design to council approval, the build itself to the fixtures and fittings, the amount you pay at the end will be determined by the choices you’ve made along the way.

Hidden Costs2

Prime costs are generally already in place by the builder, however, keep in mind that in base contract packages, the prices factored in often account for the cheapest materials, the most basic fittings, and the most standard fixtures.

Then there are all the hidden costs, such as soil testing and site fees that probably haven’t even been taken into account.

Here are the 23 hidden costs you need to know about when building a house in Australia.

1. Permits and inspections

Before you can start building, you will need to obtain various permits from your local council.

You may require a planning permit for a new home, extension, or renovation.

Your local council is responsible for issuing a planning permit. If you need a planning permit, it must be issued by your local council before you can obtain a building permit.

In certain locations, you may require permits related to heritage, bushfire, or vegetation overlays

2. Engineering or architectural services

Depending on the complexity of your home, you may need to hire engineers or architects to design your home and ensure that it is structurally sound.

These professionals can charge thousands of dollars for their services, which can add significantly to the overall cost of your home.

3. Soil testing

Hidden cost: $1,000-$2,000

It’s not as simple as buying a plot of land and getting straight to building, the first step builders need to take when building a house in Australia is soil testing.

Soil Testing
Soil testing will determine the composition of the soil and whether or not that type of soil can support the foundations of the new home - without this testing you could find your new home shift or move after it’s built (disaster!).

Using the soil testing results, the builder (and property designer) will be able to design a property that will stand the test of time, with the correct foundations to suit the earth.

4. Site preparation

Before you can start building your home, you may need to prepare the site by grading the land, installing utilities, and possibly even blasting rock or removing trees.

These costs can add up quickly and can be a significant part of your overall budget.

5. Land registration

Hidden cost: $1,000-$2,000

Many parcels of land have already been subdivided and registered before they’re sold.

But if you’re wanting to build on new unregistered land, you’d have to take those registration fees into account.

6. Landscaping

Hidden cost: $8,000- $100,000

Quotes of building a house are usually for just that - building the house.

There is also the surrounding land to take into account.

While the cost of landscaping and outdoor features might not be a significant part of the overall budget for your home, they can still add up quickly.

This might include things like fencing, decks, patios, and outdoor lighting

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Tips: You don’t necessarily need to pay for someone to do the work, DIY is possible if you need to stick to a budget.

7. Road closure fees

Hidden cost: Anything from $120-$2,000 (depending on the notice given, length of time, type of road, and the local council)

At some point, you might need to obstruct or even stop traffic for large vehicles to access your property to drop off supplies or even help construct the building.

If this happens, your local council might issue you a bill for the inconvenience.

8. Temporary site fees

Hidden cost: $10,000-$70,000

Temporary site fees include things such as temporary fencing, temporary water, electrics, and even toilets - think anything that the builders need on-site to be able to get the job done.

9. Stamp duty

Hidden cost: Variable as it is a percentage of the land value at purchase.

Stamp duty is applied to those building a property in a similar way to stamp duty applied for any new property purchase.

The difference is that when you build a home you only pay stamp duty for the land and not the home constructed on it.

10. Conveyancing fees

Hidden cost: $1,000- $2,200 (depending on the state, property type, and complexity of the build)

When building a property you need to engage with a conveyancer who is experienced in the law surrounding new build properties.

A conveyancer will help with the legal matters associated with buying the land and building the property.

11. Utility connections

Hidden cost: Various (depending on whether the land has had any previous utilities and its location)

Before you build your property, you need to work out how you’re going to power it… and how much connecting those utilities will cost you.

This includes sewerage, water, electricity, and gas.

12. Flood protection

Hidden cost: Various (depending on flood level zoning/what work needs to be done)

If your land is in what is considered a flood-prone area you need to apply for flood protection, which you might not have taken into account.

Properties in some areas need to be built in a certain way so that it is protected in event of a flood, such as raising the property a certain level off the floor or ensuring switchboards and electricals sit above the flood level.

Bushfire protection

13. Bush fire protection

Hidden cost: Various (depending on location and bushfire risk)

Properties in certain areas will need to be designed to withstand the chances of the property being damaged during a bushfire.

This can be anything from only using a certain type of roof to having to create a bushfire protection barrier around the property.

The level of work depends on the location of the property in relation to bushfire-prone areas.

14. Driveways

Hidden cost: $2,000+

Did you know that, like landscaping, a driveway probably won’t be included in your build cost either?

The cost of a driveway can vary greatly depending on the size and what you want.

As a guide, a concrete driveway could set you back around $2,000 on an average-sized flat driveway, and there’s a premium if the driveway is on a slope, typically around an extra $10 per sqm.

15. Council fees

Hidden cost: Varies (depending on your local state and council)

From approvals to assessments, construction certificates, and building permits, and even archiving… you’ll need to budget for your council fees when budgeting for a new build property to avoid any surprises.

Your build needs to be approved by the council before construction can begin.

Extra Light

16. Extra Lighting

Hidden cost: $60-$120 per switch

When planning your new build property, you need to pay attention to the number of lights and power outlets included in the quote.

Before agreeing to anything you need to make sure there are adequate lighting and power points for the number and type of rooms in the property.

Extra lighting and power points mean extra costs (approximately $60-$120 per switch), but establishing this early on in the plans will save you down the track.

17. BASIX regulation (NSW)

Hidden cost: $8,000-$10,000

If you’re building a property in New South Wales, you’ll need to make sure your building complies with the new BASIX sustainability regulations in order to get a BASIX certificate.

The certificate itself costs around $200-$350 but you’ll need to keep the cost of installing the required items to be able to get the certification, such as a water tank.

18. Estate covenants

Hidden cost: Various (depending on the type of covenant and the work needed)

Depending on the location or your property, your council may have particular estate covenants that you need to follow during the construction.

These are rules for how you are permitted to build your property.

For example,

The property might have to be set a certain distance back from the street, or access may only be permitted on a particular side.

Also, property in close proximity to things like major roads or railway lines might be required to have double glazing.

19. Insurance

Hidden cost: Up to around $5,000

Your builder needs to have Home Building Compensation Fund (HBCF) cover for the property build and you'll need to have home insurance and contents insurance in place before you move into your new property (or you sell or rent it).

Newly built houses generally come with a warranty, but that warranty will only cover you for building-specific issues, so it’s a good idea to take out insurance to cover the rest of the property, and any belongings inside it.

Home and contents insurance can cost up to $5,000.

Canstar provides a great guide for how much you can expect to pay for home and contents insurance in each state.

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20. Home loan costs

Hidden cost: Various (depending on home loan size)

Another cost to take into account is the cost of the loan taken out in order to pay for the build.

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Note: You’ll have to pay for your repayments and interest before the property is finished, and far before you move in or rent the property out.

Builders are generally paid in installments, the details of which would be laid out in the agreement you signed with them.

21. Delays

Unforeseen delays can occur for a variety of reasons, such as inclement weather or issues with the site.

These delays can increase your construction costs due to the need to pay for additional labour and materials or more holding costs because of longer construction times.

22. Changes

As construction progresses, you may decide to make changes to the original plan.

These can add significant costs to your project.

Furnishing and Decoration

23. Furnishings and decorations

Hidden cost: Various (depending on the fixtures and fittings chosen)

Once your home is built, you will need to furnish and decorate it. While these costs might not be directly related to the construction of the home, they can still add up quickly and significantly increase the overall cost of your new home.

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Note: Building a new home can be a costly endeavour, and it's important to be aware of all the hidden costs that can add up.

: By failing to prepare, you are preparing to fail, so budgeting for these costs in advance, you can ensure that you have the financial resources you need to build the home of your dreams.

About Greg Hankinson Greg and his team have successfully built and renovated in excess of 500 homes throughout Melbourne and are showing no signs of slowing down anytime soon. Being a Gold member of the Housing Industry Association and National Kitchen and Bathrooms Association, Greg’s focus is on Continued Professional Development, not only for himself, but his team of industry experts.
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