top of page
  • Writer's pictureScott Clark

Costs That May Surprise You - Budgeting for your dream home or cottage


As spring is around the corner you may be starting to think about a custom home or cottage build. The cost of such an endeavour is probably one of your main considerations. Budgeting for your custom dream home or cottage can be tricky and you don’t want to be caught off guard by unexpected expenses. We thought we would take a page out of our 7-Step Guide to highlight 14 things that may surprise you that add to the cost of the overall build.

Note: Costs are approximate and subject to vary based on economic climate and complexity of build.



Even the most meticulously planned projects can run into snags, changes, delays, and unforeseen circumstances that could cost money. For these situations, it’s wise to set aside about 3% of your budget to support these instances as they arise.



If you have an existing structure on your property, you will need to plan and budget for its demolition and safe disposal of the contents. This will cost at least $10,000 and can increase substantially depending on the size, weight, and condition of existing buildings. Demolition will need to take place prior to the beginning of construction.



You’ll require an architect, engineer, or designer to bring your vision to life. This all starts with a rendering. Upon completion and your approval of the drawing, it will then go into construction drawings which include elevations, floor plans, and roof plans. These drawings guide the builder on how to construct your home and are required to obtain a building permit. Most municipalities also require HVAC, plumbing, grading, and electrical plans. Plan for about 2-4% of your total budget to go toward these design services.



If your lot is vacant and has never been developed, your municipality will likely charge development fees. Depending on the municipality and the public services you will be using (i.e. roads, sewer, water) the fees may range from $8,000 to $25,000 or more.



There are a variety of permits that accompany your new home or cottage build. This includes demolition, building, septic, entrance, and occupancy permits. Each permit is priced differently with the most expensive usually ranging between $9 and $12 per $1,000 of construction value.



A good builder will carry liability insurance and WSIB, which is mandatory in some jurisdictions. The builder’s liability will only cover claims where the builder is directly at fault, not claims such as material damage or theft during the construction phase of the project. As a result, your builder will recommend that you take out builder’s risk insurance to protect you and your property. Budget approximately $15,000 annually for this additional insurance during the build.



The cost of land and hardscaping can vary widely and is all dependent on personal preference, materials for the design, and the overall project scope. For minimal landscaping such as sod, seeding, and minor grading, budget around $5,000. For stonework steps, gardens, trees, ponds, and other ornamental features, the rule of thumb for cost is generally 10% of the total build cost.



Most estimates do not include major appliances, such as a stove, fridge, dishwasher, washer and dryer unless you request that they be included. If you plan on installing new appliances, research the brands, features and functions that suit your personal taste and budget accordingly.



Site preparation for your new home or cottage can include blasting, tree and debris removal, driveway construction, grading, and any other activity necessary to prepare the site for construction. These costs can vary greatly and are dependent on the characteristics of your property.



While most construction costs are quoted with both federal and provincial taxes, you’ll need to factor in 13% for all of the products and services you purchase outside of your build. This can add up quickly and can be a significant portion of your budget.



The cost of your property or lot can vary widely depending on your location. Budgeting for this amount depends on many factors, but usually comes down to location, location, location! You’ll also want to factor in:

  •         Legal fees which are approximately $1,300

  •         Land transfer taxes, which are 0.5% of the property value up to and including $55,000 for property under $2M

  •         A standard septic system is approximately = $40,000

  •         Potable water drawn from a lake or river costs approximately=$7,000

  •       A drilled well costs approximately = $25,000



If municipal services such as piped water, sanitary sewers, natural gas, and hydro are available to your lot this can cut down on costs. However, there are still expenses involved in hooking up to the existing services and those costs will vary depending on the service provider and the distance from your lot to the services. At minimum, budget at least $3,000 per service connection.


Most rural lots will require private water and sewage services. If hydro is not available to your property, substantial costs could be involved in running from cable the nearest power supply unless you choose alternative energy sources such as solar panels. The cost is dependent on the location of your home or cottage in relation to the nearest power supply. Your builder can assist with a realistic estimate, however you should estimate water and sewage services as follows:

  •         A standard septic system = $40,000

  •         Potable water drawn from a lake or river, where permitted =$7,000

  •         A drilled well costs = $25,000



If you don’t already have one, a land survey will be required to situate the dwelling and services, such as sewage disposal, on your property. The survey will form the basis for a site plan which is required to obtain a building permit. The average cost for a survey can range from $3,000 to $7,500 depending on the lot size and required detail.


For a quick reference on unexpected costs, see the chart below.

If you’re looking for more tips on building and planning your dream home or cottage, download our new 7-Step Guide to Building Your Dream Home or Cottage. GET IT HERE >>

268 views0 comments


bottom of page