Home Extension Cost Guide: How Much to Budget in 2025?

Are you finding yourself hoarding more and more stuff, are your kids getting older, and moving out yet your house is shrinking in front of your eyes? If your home no longer meets your needs in terms of space, maybe it’s time to consider a home extension or addition project. Maybe a kitchen extension, storage area, or a new family room is in the books.

There are many options to consider and questions to ask. How much does a home extension typically cost? What influences the price, and what extra expenses might arise? This article addresses these questions to help you more effectively plan your project.

How Much Does It Cost to Put in a House Extension in Canada?

House Addition Prices Per Square Foot

The cost of a home addition hinges on the build you’re planning.

Single-Storey Renovation

In terms of building up, meaning adding another floor, a home addition can cost between $175–$400 per square foot, based on work and design complexity, including materials used. Said price range typically includes the core structure, but can vary based on project specificities, such as finish or insulation work.

Regarding a single-storey home renovation, such as an extension (front, back, sides), prices range from $200–$500 per square foot. 

If your project includes a basement, note that finishing work will cost an additional $70 to $100 per square foot. 

Also, note that the more square footage there is, the lower the price per square foot will be. Indeed, large-scale home renovations often benefit from economies of scale, which can render the extension or addition more cost-effective in the long run. Hence planning a bigger home extension project may end up being more worthwhile than carrying out several, small-scale changes individually.

Two-Storey Renovation

For a two-storey extension, changes made to the ground floor cost between $360 and $480 per square foot, whereas second-floor changes cost between $210 and $240 per square foot. The pricing difference is because second-floor building work tends to be less complex, especially when it comes to foundation and core structure.

Budgeting at least $75,000 for a home extension is important, no matter the build’s scale. However, the final cost is likely to be around $100,000–$300,000, based on project specificities, such as materials used, extension size, and selected finish. Considering these factors from the get-go will help you plan your budget and avoid financial setbacks along the way.

Specific Addition Examples

Basement Extensions and Finishing

Finishing an existing basement increases living space cost-effectively in urban Canada, with basic projects (flooring, drywall, lighting) typically costing $40–$75 per square foot, while mid- to high-end finishes reach $75–$100+ per square foot.

Adding or expanding a basement via underpinning and excavation involves major foundation work, often totaling $150,000–$300,000+ for urban projects in Ontario or Quebec, including waterproofing, insulation, and code-required egress windows. These extras ensure compliance with Canadian building codes and can add 20–30% to costs.​

Sunroom Additions

Three-season sunrooms, with minimal insulation for non-winter use, generally cost $25,000–$50,000 total, varying by size and materials in Canadian markets. Four-season sunrooms, built for year-round use with heating, cooling, and insulation, range from $225–$350 per square foot on piles (cheapest option) to $310–$420+ per square foot on slabs or full foundations, higher in Toronto than Montreal. Piles reduce upfront costs but offer less thermal performance than concrete bases.​

Attic Conversions

Attic conversions suit homes with at least 7 feet of roof height, transforming space into bedrooms or offices at $150,000–$250,000+ total (often $300–$400+ per square foot) in major Canadian cities, due to structural reinforcements, stairs, and insulation. Costs rise with roof raises or added features like bathrooms.​

Room Additions

Bedroom or home office additions cost $50,000–$100,000 (roughly $200–$350 per square foot), depending on size and finishes. Bathroom additions range $30,000–$75,000+, influenced by plumbing and fixtures. Kitchen extensions hit $75,000–$150,000+ from cabinetry and appliances; smaller 10x10 or 12x12 rooms start at $20,000–$45,000.​

Garage Conversions and Additions

Garage conversions to living space cost $30–$75 per square foot for basic work, higher for full suites with plumbing. New single-car garage additions run $37,000–$90,000; two-car versions $87,000–$132,000, depending on finish and location.

Bump-outs, small room extensions of a few feet, cost $85–$200 per square foot—less invasive than full additions, often avoiding major foundation changes.​

In-Law Suites

In-law suites, with separate entrances, kitchens, and bathrooms, cost $100–$250 per square foot for additions or conversions, totaling $40,000–$200,000+ based on size and independence.​

For more information about home extensions or additions, check out The Cost of a Home Addition Project and our Home Renovation Price Guide. 

What Factors Affect the Cost of a Home Extension or Addition?

Source: Canva

Size of Extension/Addition

As detailed in the table above, the cost of a home extension or addition primarily depends on the added square footage. The bigger the extension, the higher the total cost. Although we mentioned that adding more square footage means a lower price per square foot, it’s important to note that final project costs will inevitably increase on account of the build’s scale. No surprise there, but a bigger space requires more flooring, exterior siding, windows, and other materials, which, in turn, increase total costs. As such, it’s essential to assess your needs accordingly in terms of space before committing to a home extension project. 

Type of Extension or Addition

The type of extension or addition you choose to build will significantly influence the cost of your project. For example, adding a new room, such as a bedroom, three- or four-season sunroom, or home office, generates more expenses due to the mandatory additional construction. A garage conversion makes for a cost-effective option when repurposing an existing structure. On the other hand, adding a storey is a more significant investment on account of the structural requirements, whereas porches or conservatories (possibly needing larger windows) mandate specific material and installation costs assessed by your hired general contractor. By considering the previously mentioned factors, you can better plan your budget for your need-specific addition.

Complexity Level

The project’s complexity level can significantly influence the cost of a house extension, whether it’s upwards or downwards. The number of scaffolding and the proximity to busy streets and commercial areas are all examples of factors that can increase project costs.

Due to the complex nature of extension projects, homeowners should verify their chosen contractor carries contractor specific general liability insurance to protect against potential accidents or damage during construction.

Exterior Siding

Exterior siding choice is another cost-determining factor affecting the overall price of a house extension. High-end materials like natural stone, noble wood, and luxury tile can significantly increase costs, whereas affordable alternatives, such as PVC or plaster-based coatings can keep a lid on expenses. Exterior siding and finishes not only affect the cost but also the extension’s aesthetic appeal and durability. 

What Are Examples of Additional Costs?

Architectural Style

The addition or extension’s architectural style will also directly influence costs given that it’ll determine the project’s complexity and the build’s requirements. The more elaborate the design, the higher the costs due to materials and labour needed.

Foundation Work

Foundation work can be mandatory for a home extension, but it depends on the type of structural add-on and the quality of the soil beneath. If the land is stable and the extension lightweight, extending or building a new foundation may not be necessary. However, if the project is deemed more complex or built on less stable ground, a reinforced or adapted foundation will be essential, which will inevitably increase costs.

Demolition or Preparation Work

Necessary demolition or site preparation work can also affect a home addition project. Depending on the scope of your project, removing existing structures, cleaning the yard, or adjusting some features may be in the cards to accommodate the new extension. Such work can incur additional fees, so it’s essential to consider the above when planning a home extension budget.

Our Tips to Make a Well-Informed Decision

In conclusion, the cost of a home extension or addition hinges on several factors, such as project size, material choices, and project complexity level. A well-built extension will not only result in additional space but can also increase the market value of your property, making it more functional and suited to your needs.

Benefits and Return on Investment (ROI) of Home Extensions

Extending your home offers more than just additional space—it can be a strategic investment that enhances both your lifestyle and your property’s value. By increasing your home’s square footage, you not only enjoy greater comfort and functionality, but also boost your home’s market appeal. Well-planned additions, such as extra bedrooms, bathrooms, or dedicated office spaces, can address specific needs for growing families or remote work, making your home better suited to your lifestyle without the hassle of moving.

From a financial perspective, home extensions typically provide a solid return on investment. Industry data suggests that homeowners may recoup 50–60% of their extension costs through increased property value when it comes time to sell, though the exact ROI depends on factors like location, quality of work, and current market conditions. Strategic choices—such as focusing on space efficiency, addressing local buyer expectations, and choosing timeless designs—can help maximize your return.

Ultimately, a thoughtfully executed home extension not only improves day-to-day living but also serves as a long-term asset, making your home more desirable and valuable in the real estate market.

FAQ

Do I need a building permit to extend or add to my house in Canada?
Yes, as a homeowner, if you’re planning on extending or building onto your home, you’ll need a building permit. However, rules and regulations are likely to vary from one city, or province, to another, so it’s important to contact your municipality with all questions or concerns regarding building permit acquisitions.

Can adding a second storey affect my house's market value?
A home extension can significantly increase the value of your property. While the exact impact hinges on factors like extension type and size, research indicates that the market value increase ranges from 8% to 23%.

On average, how long does a home extension build take?
The duration of a home extension project largely depends on its scale; small-scale projects typically take less time, whereas large-scale projects require a lot more time. On average, expect the build to take at least six months, give or take a few months.

What financing options are available for home extensions in Canada?
Homeowners can fund their home extension projects through several methods, including home equity loans or lines of credit (HELOCs), personal savings, personal loans, and—depending on the region—government grants or rebates for specific renovations like energy efficiency upgrades. Each option has different requirements and benefits, so it’s important to compare interest rates, eligibility, and terms before deciding how to finance your extension.

How can I avoid overspending on my home extension project?
Set a clear budget with a 10–15% contingency fund, track all expenses closely, and regularly review costs with your contractor to catch and address overruns early.