15 common hidden costs encountered when building a house

Building a new home is no small task and with hidden costs looming, it can quickly break even the best budget. To stay financially secure through building your dream home, being aware of potential expenditure becomes essential.

With our builders' top tips for budgeting your house build, and some forethought, you can avoid any unpleasant costs from looming over you and ensure that building the home of your dreams doesn’t become an expensive nightmare.

#1 Stamp duty

When buying a house, stamp duty is the biggest unseen expense. The fee is paid when transferring a property between owners and it’s calculated based on your property’s value and payable to your state government in the first three months of ownership—otherwise you may be charged interest. The amount paid will depend on various criteria such as purpose for buying, value and condition of the home, if it’s first time buyer etc., so using a stamp duty calculator can help you find out exactly how much you may have to pay upon completion of your purchase.
QLD Stamp duty calculator
NSW Stamp duty calculator

#2 Site costs

Site costs vary dramatically from block to block as they are entirely dependent on the land in your block and what work is required to make the site suitable for the build of your home. Soil and contour testing essentially determine that the weight of your house can be supported and how much work will be required to make the site ready for the building. If your block is sloped or the soil is too stoney and there are trees to be removed, the site costs will increase exponentially.

#3 Driveways, landscaping & fencing

Driveways are often overlooked whilst planning to build a home. A building quote often includes the costs for the house, and nothing more. The style, size and type of driveway will determine the price.

Estimated costs are as follows:

Plain concrete from $65 - $85 per m2
Coloured concrete from $75 - $95/m2
Exposed aggregate from $100-$150/m2
Stencilled concrete from $100 - $150/m2

As with the driveway, the builder’s quote is usually just for the house itself, and so if you would like landscaping then you need to factor in this extra cost. Landscaping and fencing can be an expensive additional cost of approximately 5-10% of your home.

#4 Land registration fee

Before you can begin building the home of your dreams on that block, it's important to ensure it has been registered and officially titled. Registration is essential for evidence of title and protection from unlawful disposal but, unfortunately, the land registration can be time consuming, taking up to a few months.

#5 Loan application fees

Loan application fees are charges for submitting a request to your lender for a loan. Fees can vary and some banks may not charge application fees at all, though the standard is a fee of around $150-$200.

#6 Mortgage insurance & lender’s property valuation

Mortgage insurance provides the lender with protection if you cannot make the repayments on your mortgage. Lenders usually require mortgage insurance if you have less than 20% deposit and usually charge an up-front fee, or add the cost to your loan.

Lenders also want the assurance that their investments are secure and that they are not over-lending so they require an appraisal of the property and its valuation. This is usually done by an independent valuer engaged by the lender and you will be covering the expenses, which is typically circa $200-$600.

#7 Mortgage registration fee

Mortgage registration is a fee charged by the state government for registering your mortgage on the title of your home. It is to be paid in full at the time of settlement and allows the lender the right to repossess your property if the mortgage isn’t paid. The amount of the fee varies from state to state but is typically circa $100.

#8 Conveyancing fees

Conveyancers are invaluable when it comes to instructing the transfer of land and ensuring that each and every legal document is in order for a smooth sale. However, costs can vary greatly depending on the complexity of the purchase; covering everything from title searches to settlement fees.

Although prices start around $1500, don't let this put you off - with conveyancing services involved looking out for any potential issues associated with property ownership changes. It's well worth investing in their expertise to avoid risks and hitches; even your deposit may be at stake and even your house!

#9 Building inspection

When you’re building a property, it’s important to have it inspected by a qualified building inspector to check the quality of the build and ensure you’re getting the property that you paid for. Costs will vary depending on the property but on average, building inspections are around $500-$1000.

#10 Building insurance

It is imperative to take our building insurance from the day that you sign the contract, not from the possession date. If any fire or storm damage occurs between signing the contract and your possession, you may not have any insurance to cover the costs. Always protect your home and your investment by activating insurance policies from the day you sign.

#11 Flooring

Unless you have a turn key package build, flooring is another cost that is not always included in quotes from builders. Account for your choice of flooring as well as the attributed overheads for installation.

#12 Temporary Site Requirements

Temporary site requirements include fences and facilities such as portable toilets, as well as temporary water and electricity connections for work to commence.

We’re including temporary road closure fees in here too as you may receive a bill from your council if you interrupt traffic or need to close roads to accommodate vehicles and machinery for the build. We advise enquiring whether these costs will be relevant prior to initiating the build.

#13 Council Fees

Council fees include:

Development application fee
Cost of approvals
Construction certificates
Portable long service leave levy - total levies in QLD are currently 0.575%
And more…!

#14 Electrical Provisions

Ensure you check the details of all quotes for the number of powerpoints and lights in each room. The last thing you want is to end up with only the minimal of each and need to fork out a substantial sum post-build for adequate lighting and powerpoints to be installed.

#15 Prime Costs (PC) & Provisional Sums (PS)

PC relates to the finishes and accessories that you want in your new home and is usually quoted by builders at the basic finishes level. Whether you have requested more impressive bathroom accessories for example, or not, the quote is only an estimate so it may rise.

PS are estimated costs for a task, material or service, such as the site works, that will be required. As the final price can’t be confirmed, you may have a nasty surprise if you have to pay more than what the contract intimates.

Custom home builders

At Symcorp Building Services, we understand that building a home for your family will be one of the biggest investments of your life. We will work with you to design and build your dream custom home that meets all of your needs, whilst being transparent around costing. If you would like to find out more or discuss hidden costs when building a house, contact the Symcorp team on 1300 043 012 or complete our custom home build enquiry today.

Please be aware that there can be many hidden costs when building a new home and so we recommend that you speak to your builders for clarification on all costs stipulated in the contract.

References:
Property Registry
RealEstate.com.au
AMP

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