Before you start construction, it’s important to have a clear understanding of the various costs involved in building a home. In addition to the obvious expenses like materials and labor, there are a variety of pre-construction costs that can add up quickly and maybe some construction costs that you might not think about, including those items that are listed as 'extras' on your contractors budget.

Let’s explore some of the most common soft and hard costs you should be aware of when building a home.

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Pre-Construction Costs

Soft costs

This includes things like:

• Paying rent to live somewhere while your home is being built or renovated

• Buying the land you’ll build on

• Land Survey (for new homes and renovations)

• Geotechnical reports (flood and hazard reports, test pit, etc.)

• Construction plans: architectural and structural

  • Possibly mechanical, electrical, landscaping, fire suppression, etc.

  • Schedules, reports, etc.

• Interior design plans

• Step code compliance (or some sort of energy efficiency documentation)

• Permits (building, demo, development, etc.)

• Legal fees (Certificates , covenants, etc.)

• Title search

• Insurance

Construction Costs

Hard costs

This includes things like:

Labor & material costs

• Labour costs (contractors, painters, framers, etc.)

• Material costs (lumber, flooring, fixtures, etc.)

• Shipping & delivery

• Inspection fees and site reports 

• WCB fees (Workers Compensation Board)

• Home warranty (if not through your G.C. / P.M.)

Sweat equity

• This means taking on certain smaller tasks for yourself, like painting the house, planting trees and plants, laying sod, etc.

Other costs

• Certain smaller expenses also add to the cost of building; portable toilets, dump / garbage runs and bin rentals, etc.

Building a home is an exciting and rewarding experience, but it is also a significant financial investment. You're going to want to know absolutely every transaction that's involved. So be sure to check with your contractor to see if there is anything excluded from the budget because it is assumed that it's not included in the project scope or an 'extra', like landscaping or decorative rock walls. And if it's not included on the budget, like the soft costs, be sure to add it to your own budget so you're on top of your numbers.

If there's anything we missed, tell us in the comments below and we'll be sure to add it to the list!