Are you wondering how much it costs to buy a land and build a house for yourself in Toronto? This guide covers the total cost of Buying Land and Building a House in The Greater Toronto Area (GTA).
On this page:
1- Land Costs
2- Demolition Costs
3- Cost of Building a House in Toronto
4- Soft Costs
1- Land costs
The first step is to buy a vacant lot in Toronto, or purchasing a house for its land. Because of the lack of vacant lots in Toronto, buying a detached house for its land is usually the best available option. Plus, if you want to buy vacant land usually the bank will not give you a mortgage on that piece of land.
The price of a detached home in the GTA varies from case to case and depends on many factors, but roughly the average detached home in Toronto sits at around $1.3 million. There are also other initial costs like Land Transfer Tax and legal fees, around 5% of the purchase price the you need to pay to obtain the land.
Now to be able to understand what your investment for the land will be, you need to reach out to your financial institution and find out your eligibility for a Home Mortgage. The down payment on your mortgage will be your capital in the land you want to build your house on.
For instance, if you purchase a $1 million house and your bank approves you for a mortgage for a defined Interest and amortization period, with 25% down payment then you will need pay $250,000 to secure the mortgage puls – in this example- $35,000 for land transfer fee and other insurance, lawyer fees to hold title for that piece of land.
2- Demolition Costs
If you purchase a vacant lot in Toronto, you don’t need to demolish the existing house, but if you buy a house for its land, the demolition costs will be added to your costs.
In most cases, the contractor that builds your house is the ideal option for demolishing the existing house as they can coordinate the process better. Also sometimes, they will be able to preserve some of the existing materials of the house. Roughly speaking, the demolition cost will be between $10,000-$50,000 depending on the size and the location of the house.
3- Hard Cost of building a house
The Cost of building a house in the Greater Toronto Area starts at around $215 per square foot and the average cost that is being built is about $260 per square foot in most of the neighborhoods in the Greater Toronto Area. This price difference is usually due to the premiums on materials, finishes and appliances that have become the standard in those neighborhoods.
For example, the average construction cost of building a 3000 square feet detached home in GTA will be near $780,000.
For building a Custom Home, it starts from around $300 per square foot and can go well beyond that. The average cost of constructing a Premium Custom Home in Toronto is about $360 per square foot.
For example, the average cost of building a 3000 square feet Custom Built Premium detached home in GTA will be around $1080,000.
4- Soft Costs
In addition to hard costs, any construction project includes Soft Costs which should be considered in the budget. Depending on the area and the scope of work, Soft cost to build a single family house in GTA Ranges from $40 to $80 per square foot.
Estimating Total costs:
Therefore, if you want to estimate the cost of Buying Land and Building a House in Toronto, you should sum up the land cost, demolition cost, Hard and soft costs of building a house as described above.
In another article, we have analyzed Hard and soft Costs of Building a House in Toronto in detail and a Simple Home Building Cost Calculator is provided to estimate the total cost of building a new house in Toronto. You can read this article here:
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