If you’re renovating or building a new home, it’s an exciting time. But it is also considered one of life’s top ten stresses. Setting a budget and adhering to it can be difficult for many. Here are six areas where you can avoid a budget blowout:

1.Overspending

You should consider what items will add value to a home, as many items are not necessarily consider of value by others when it comes to resale. If you are planning to stay in your home after building or renovating this isn’t so much of a concern, but if you are looking to sell early after the project is complete then you should consider the need for a swimming pool, extensive landscaping, stainless steel appliances, imported tiles, wall to wall carpeting, or a new heating and cooling system.

2.Underestimating

When planning your project, focus on what you want the final product to look like. One of the greatest areas of underestimating is the finishing costs. The grade of fixtures, including standing, luxury or custom can all impact on the cost of the home.

3.Land Costs

If you are building a new home, you should allow for stamp duty and settlement costs on top of the purchase price. If you’re buying land with an existing old home you should try and pay as close to land value as possible.

4.Site Costs

When building or renovating, you should allow for site preparation costs such as:

• Retaining walls
• Levelling of a block
• Demolition of an old home
• Removal of trees
• Providing new services such as water, power and gas

5.Planning Applications & Permits

Planning applications and permits all vary in cost. It is important to understand what is required in your building project and the costs associated with it. These can include council fees, driveway designs, engineering and landscape designs which will all depend on your project.

6.Internal & External Fixtures

As mentioned, the finishing costs are one of the greatest areas of underestimating. Your budget will depend on how extravagant you want to be with materials, upgrades and finishes. It is recommended for a medium level finish to allow approximately 15 per cent of your overall building budget. For a higher level finish, allow approximately 25 per cent.

There may also be one-off items which you wish to include in your home. These may include rain water tanks, solar hot water or solar electricity. These can add considerable costs and should be factored into your budget.

Keep in mind that a builder’s ‘standard’ price may not include certain costs, so be sure to specify your needs in the schedule to be sure of your final budget for the project.

If there’s one thing you should know – your project will cost more than you think. Even with the most detailed plans and cost guide, the unexpected can happen. It is recommended you add between 10 and 20 per cent of the project cost to your budget. This buffer helps pay for unexpected costs, such as unforeseen structural issues or ground works. It’s what’s called a ‘contingency’, and every good renovator or owner builder should have one.

Are you thinking of using your own skills to build, extend or renovate a home that you live in or intend to live in? Or perhaps you would like to manage tradespeople to undertake work on a home that you live in or intend to live in. If either are the case, you may be considering becoming an Owner Builder.

An Owner Builder is someone who takes responsibility for domestic building work carried out on their own land. The Owner Builder is responsible for obtaining Building Permits, supervising or undertaking the building work, and ensuring the work meets building regulations and standards.

In Victoria, an Owner Builder can only build or renovate one house every five years and must intend to live in the house once completed.

Some of the obligations of an Owner Builder last for six and a half years after completion of the building work.

If the value of your proposed domestic building work is more than $16000.00 (including labour and materials costs) you will need to apply for a Certificate of Consent from the VBA (Victorian Building Authority) to become an Owner Builder.

The Certificate of Consent enables you to obtain a building permit and carry out domestic building work as an owner builder on your land.

In deciding whether to issue a certificate, the VBA will consider whether the applicant:

• Intends to live in the property upon completion of the building work;
• Owns or co-owns land for which a building permit has been granted in respect of an owner-builder project in the past five years;
• Has the prescribed knowledge of the duties and responsibilities of an owner builder.

Before applying to the VBA for a Certificate of Consent to become an Owner Builder, it is recommended you download the Owner Builder Information & Study Guide from the VBA website. This outline the key information about being an Owner Builder including your duties and responsibilities as an Owner Builder. The next step is completing the eLearning Assessment that must be submitted with your application. Note: To be able to complete the assessment and proceed to the next step of applying for a Certificate of Consent, you must answer all questions on the assessment accurately (ie: achieve 100% mark). A person’s mark will have a currency for 12 months.

It takes approximately 3 weeks to process an application for a Certificate of Consent assuming all information is provided.