There are many costs to consider before buying the perfect block of land to build that much sought after dream home, but it is very important that you consider all aspects before you begin. Failing to do so could turn your exciting project into a money pit hole. Costs of building
There are many financial aspects to consider, most people will already be aware of the land purchase price and the construction costs, but other costs to consider which are not quite so obvious include council requirements, unexpected building and site works costs and taxes and bank fees, which in turn each hold their own hidden costs.
– Some councils request the landowner obtains a storm water assessment report to assess the soil nature and locality before building begins.
– There may be fees to enhance public spaces and community infrastructure
– If building is very close to a set of traffic lights or if the sewer needs realigned there may be traffic management costs.
– Specialists may need to be brought in to assess the land before building can begin to produce Geotechnical reports.
– If building near to an airport or bushfire prone area there may also be costs to meet building compliance standards.
Unexpected building and site works costs
– Buyers commonly forget to factor in site works and building variations, they will simply assume that a single-story building will cost the asking price and nothing more.
– To prepare a block of land there are also civil works and engineering costs to consider these can include:
o Retaining walls
o Sewer extensions and realignments
o Post demolition asbestos removal
o Soil analysis
o Temporary fencing
o Unexpected design variations
o Build inclusions and upgrades
o Changes in technology for example adding in NBN connections
o Construction, finance and council requirement delays
Taxes and bank fees
Additional costs out with the purchase price of the block of land include:
– GST and capital gains tax – if you are planning to sell after completion of the build.
– Bank charges
– Loan establishment fees
– Drawdown fees
– Interest payments on your loan whilst you build.
By looking at and considering all the above ‘hidden’ costs you can ensure that your budget can meet your expectations, making buying and building on a block of land a smooth and stress free process. A buyer’s agent can help to reduce your risk and achieve a positive outcome.