What are the hidden costs of building a house?

Information in this article is general in nature and does not constitute financial or legal advice. Costs, inclusions and eligibility for government schemes vary by builder, lender, location and individual circumstances.

This article was prepared with general guidance contributed by an industry professional. Always confirm contract details and costs directly with your builder and lender before signing.

Building a new home is an exciting milestone, especially when you’re building in a masterplanned community where parks, amenities and everyday convenience are designed in from day one. But even with a great builder and a great block, there are costs that can surprise first home buyers if they aren’t budgeted for upfront.

The good news is most “hidden costs” aren’t truly hidden, they’re simply easy to miss unless you know what to ask.

Below, we’ll walk through the most common cost traps (and how to avoid them) so you can build with confidence.

1) Start with your real budget (not the advertised price)

“If the deal seems too good to be true, it probably is,” says Ms Shenstone, Marketing Manager for Western Australia’s Homebuyers Centre. That doesn’t mean promotions are always a problem, it means you should understand what’s included and what isn’t before you fall in love with a headline price.

Before you choose a house and land package or home design, make sure you’ve clearly mapped:

• What you can comfortably repay (including a buffer for rate changes)
• How much deposit you have (and when it’s needed)
• The likely overlap period where you may be paying rent plus loan repayments during construction

A mortgage broker can help you understand borrowing capacity and how lenders assess your expenses and existing debts before you commit.

2) Siteworks and ground conditions

Siteworks are the works required to prepare the land so your home can be built, including things like soil tests, contour surveys, and earthworks.

This is one of the biggest sources of surprises, because costs can change depending on what’s discovered once detailed reports are done.

As a guide:

• Standard flat blocks often see siteworks in the $10,000–$25,000 range
• Sloping or more complex sites can be $25,000–$50,000+

The best way to protect yourself is to ask whether your contract includes:

• fixed siteworks (preferred), or
• allowances/provisional sums (estimates that can rise)

3) Provisional sums and allowances (the “estimate” problem)

A provisional sum is essentially an estimate used when the builder doesn’t yet have enough information to provide a fixed price.

If the allowance is too low, you pay the difference, which is why provisional sums can feel like a “hidden cost” later.

Ask your builder:

• Where are provisional sums used in my contract?
• What assumptions are you using?
• Can any of these be converted to fixed prices before I sign?

4) Variations and upgrades during the build

Small changes add up fast, and many buyers underestimate how often variations occur.

Common budget blowouts include:

• Layout changes after contract signing
• Upgraded cabinetry, tapware, tiles and appliances
• Higher ceilings, extra power points, feature lighting
• Cooling (split systems/ducted air-conditioning)
• Solar and battery upgrades

A practical approach is to set a separate upgrade budget (even if it’s modest) and decide in advance what matters most to you.

5) What “turnkey” really means (and what it doesn’t)

Some packages are marketed as “turnkey,” but inclusions can vary between builders.

Common items that may not be included unless explicitly stated:

• Landscaping
• Fencing
• Driveway and paths
• Window coverings (blinds/curtains)
• floor coverings throughout
• letterbox, clothesline
• television aerial / NBN connection work

Always request a written inclusions list and confirm what’s excluded.

6) Connection and authority fees

Depending on location and provider, you may need to budget for:

• Water and sewer connections
• Electricity connection and metering
• Gas connection (if applicable)
• NBN/telecommunications connection
• Council/building permits, inspection fees and certification

Some of these may be included in your land purchase or your build contract, but don’t assume. Ask for a clear, itemised breakdown.

7) Legal and finance costs that add up

Even when your deposit is ready, there are often costs around the transaction itself, such as:

• Conveyancing/settlement fees (land contract + build contract)
• Lender fees (application/valuation/settlement fees depending on the lender)
• Lenders Mortgage Insurance (LMI) if your deposit is below 20% (unless you’re eligible under a scheme that avoids it)

From October 2025, the Australian Government 5% Deposit Scheme has expanded significantly, with no income caps and unlimited places for eligible first home buyers, helping many buyers purchase with a smaller deposit and avoid LMI. Your broker can confirm eligibility and price caps for your area.

8) Builder selection: quality, time and cost risk

One of the best ways to reduce surprise costs is choosing a builder with a strong track record for:

• Build quality
• Clear communication
• Realistic timelines
• Transparent contract pricing

Ask questions early, including:

• How long have you been building?
• Can I speak with recent customers or view completed homes?
• How do you handle variations?
• Do you include fixed siteworks?
• Where do you use provisional sums?

And remember: you can never ask too many questions.

Quick checklist: what to budget for (so it’s not “hidden”)

• Siteworks + reports (soil/contour)
• Provisional sums/allowances
• Upgrades and variations
• Connection and authority fees
• Fencing/landscaping/driveway (if not included)
• Legal and finance costs
• Rent + repayments overlap during construction

Ready to build in a Satterley community?

At Satterley, we’ve been creating vibrant, connected masterplanned communities across Western Australia, Victoria and Queensland for more than 45 years. Our team can help you understand the buying process, connect with reputable builders, and explore land options that suit your budget and lifestyle.

Explore our communities or get in touch to start the conversation.