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What are the costs to consider when building a new house?

Last modified: 2019/02/06 | Approximate reading time 7 mins

Building a new home is an exciting prospect, as many wait their whole lives to be able to put their plans for a dream home into action. Of course, constructing a house from the ground up can be a complicated process.

If you wouldn’t consider yourself a renovation professional, there are plenty of aspects of home renovation that may be overlooked. There are lots of hidden costs involved when having a home built, and thus, it is important to do ample research to know exactly what you’re getting yourself into.

Doing your homework as well as working with a professional can ensure that you are prepared for the burdens that a new construction project entails. We’ve done most of the research legwork for you, so read on for the crucial info regarding the costs of building a new home!

Here are the steps and costs to consider when building a new home

1) Getting started


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Beginning your new home construction project is one of the most exciting parts! However, the costs of the project can vary widely and will greatly depend on what part of the country you’re in as well as how complex you plan on making your new home. There are plenty of ways that unexpected costs can pop up, especially if your home renovation project is fairly elaborate.

We’re going to give you a rundown of the basics steps to take when approaching home construction:

2) Floor Plan for the Home

Depending on your expertise in the home renovation market, you can draw a floor plan up yourself or purchase one online. The prices of purchasing a floor plan will range between $200-$2000. Hiring an architect to complete this step will obviously cost the most, but may also provide you with the comfort moving forward.

If you decide to hire an architect, count a minimum of $3,500 for the design of the plans (average price for a 200 sq.m. house with two levels plus a basement). For a larger home (between 300 and 500 sq.m.) the prices start at $5,000 to produce the architectural plans that will be presented to the municipality for the purpose of obtaining a building permit.

3) Finding a Contractor

Once you have a floor plan in place, you can begin to look for a contractor or a company that will turn plans into reality. You can shop around your floor plan to find someone who understands your vision and is able to carry it out.

4) Specifications for a New Home Construction Project

Now that you have found a contractor to work with, you will need to discuss the specifics and come up with a detailed list of the specifications of the project. In the majority of cases, you will need to leave a deposit, as this is a time-consuming process.

5) Construction Loans and Programs

In many cases, it may be difficult to cover the costs of building a new home. For this reason, you may consider taking out a construction loan. You’ll need all aforementioned details (floor plan, building company and a list of specifications) before applying for a loan or line-of-credit. You will likely need to pay for your own appraisal, credit checks or any other stipulations that the lender may require. Worth mentioning is that title insurance on the land is generally purchased when the construction loan is closed.

You may also have access to programs offered by the various levels of government: municipal, provincial and federal. Be sure to find out about the programs currently in place and to be familiar with the requirements that come with them. Information can often be found on government and municipal websites, but you can also go in person to their offices to ask more specific questions.

6) The Building Process for a New Home

The building process will obviously cost the most. Typically, you will pay the contractor you’re working within increments, at different stages of completion. The building process is generally where you will find yourself going over budget, so be aware.

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7) Closing the Mortgage and Calculating the Value of the Home

Months later, once your home is complete, you may need to take out an additional loan to pay off any construction fees. Generally, this is in the form of a mortgage that will be used to pay off the house.  At this stage, the house will also need to be appraised. However, if the house does not appraise for what it cost to build, you’ll need to pay off the difference. 

Other new home building costs to consider

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As we mentioned, the costs of the home renovation itself will be hard to pin down. This is because costs will vary widely depending on where you live as well as the shape and size of both your home and property. But, we can go over some of the other costs when it comes to building a house from scratch:

8) Building Permits and Their Costs

In many cities and municipalities, it is necessary to apply for several permits to take on a full home construction. This will include plumbing permits, electricity permits, construction permits, zoning permits and so on. Again, depending on the city as well as the size of the project, you could be looking to easily spend anywhere between $800-$5000.

9) Preparation Fees

Before any building actually happens, the land will need to be prepared to be built upon. This will include clearing away any trees that are in the way of the project, accounting for drainage as well. Further, you will need to think about driveway placement, which is a costly project. The land your home will sit on may also need to be graded, or levelled out. Levelling out the land alone can cost between $3-$10 per square foot.

10) Utilities

Now, this may not affect you but it is important to mention that additional costs will be involved if your plot of land does not already have access to electricity or gas. This will involve having the electricity company to connect and hook up these necessary utilities. Additionally, it will be necessary for you to have access to a local sewer system or create a septic tank. Finally, you will need to be able to access a public well. The costs will vary widely, depending on what you need for your property, and could be anywhere from $2000 to $10,000.

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Average cost to build a new house in Canada

As you can see in the previous paragraphs, there are many factors that can affect the cost of building a new home. Of course, this type of project will not have the same price or the same implications in Vancouver or in Antigonish. According to a recent article in Home Builder Canada magazine, here are the average costs for building a single-family home (without a basement) in Canada's biggest cities (not including the expenses listed above) 

  • Montreal:  $ 95 to $ 160 per square foot;
  • Vancouver: $130 to $230 per square foot;
  • Toronto: $110 to $210 per square foot;
  • Calgary: $115 to $150 per square foot;
  • Halifax: $115 to $150 per square foot.

With that in mind, it can be inferred that in smaller cities and rural areas, these amounts will be slightly lower, although the base costs are similar.

Would you like to add a basement to your home? Expect to pay approximately $50,000 to $85,000 for this type of addition. For more information on this subject, see the article 10 factors that affect the price of an excavation project.

For more information on the prices of various construction and renovation projects that could be part of your new home, check out our Home renovation price guide.

Final thoughts on your new home building project


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While drawing up an initial construction contract with your contractor or the company you’ve chosen, it is relatively impossible to specify every single material that you will end up using. Changes may occur during the building process, and these will need to be accounted for in relation to your budget. Further, the construction or building company you are working with will likely specify a building allowance. These allowances will likely be included in the contract you draw up, dividing your budget to specific jobs and materials.

Going beyond these figures will require you to pay the difference. Be sure to double check the numbers and identify any unrealistic allowances, either those which are too low or too high.

Surprises are likely to arise in any construction project, especially one as building a home from the ground up. For this reason, make sure you are ready to undergo the cost as well as the labour involved in building your new home. 

Recap of the prices associated with building a new home

(not included: building materials and labour)

Type of service Average cost
Building plan Between $200 and $2000
Getting the permits Between $800 and $5000
Levelling the ground Between $3 and $10 per square foot
Utility hook-ups Between $2000 and $10 000
Cost to build the home
  • Montreal:  $ 95 to $ 160 per square foot;
  • Vancouver: $130 to $230 per square foot;
  • Toronto: $110 to $210 per square foot;
  • Calgary: $115 to $150 per square foot;
  • Halifax: $115 to $150 per square foot.
Excavating the basement Between $50 000 and $85 000

Get quotes for your home construction project can help you get quotes for your home construction project. If you submit your project to us, we’ll put you in contact with top-rated contractors. Fill in the form on the homepage (it only takes a few minutes), and you will receive quotes from companies that are specialized in home renovations.

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