Hidden costs of building a house in Australia

March 15 2023

"On top of the cost of building a house, there are other costs that you inexperienced investors may not be aware of." - Marco Zande, Strategy Executive.

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.

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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 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

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.

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To view the full article, visit Property Update.

Yardney, B. (2023, March 6). Hidden costs of building a house in Australia. Property Update. https://propertyupdate.com.au/hidden-costs-of-building-a-house-in-australia/