How Much Does a Custom Home Cost?

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There is nothing quite like a house that bears customized features, finishes, and materials, designed and built completely unique to your specifications. With this goal in mind for so many of the individuals living in-and-around Toronto, it’s important to ask the following questions: how much does it cost to build a house in Toronto, and what are the costs involved? How can you make the dream of owning a custom Toronto home a financial reality? What are some important considerations you’ll need to remember throughout the pricing, planning, and development phases?

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In this article, we’re going to explore the costs that go into building a custom Toronto home. We’ll break down the cost and cost composition, the various styles of homes and the reasons for selecting each, key timelines and budget considerations, and more. Let’s get started with what you need to know to make your custom Toronto home a reality!

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How Much Does It Cost to Build a House Per Square Foot?

When it comes to building a custom home in Toronto, there’s one thing for certain: it won’t be cheap. Given the meteoric rise in popularity of the city, and a scarcity of new development land, the past few decades have brought about rapid price increases across from east to west. When planning your custom home, anticipate a starting cost per square foot of $285, this being the price paid for the actual development of the home. Purchasing the land is a completely different story.

What Composes the Pricing?

Custom luxury homes are complicated projects, and as such, there is a multitude of tasks, materials, and more that will weigh on the final cost. A few of the most important line items will include the land, fees and permits, square footage, materials, and builder. The table below outlines all of these items with anticipated pricing, alongside the percentage of project completion that they make up.

Line ItemPricePercentage of Overall Cost
Demolition and Excavation$20,0002.3%
Footing and Foundations$30,0003.5%
Framing Labour and Material $145,00017.0%
Basement Concrete Slab$15,0001.8%
Steel Beam and Angles$5,0000.6%
Brick and Stone plus Labour $80,0009.4%
Electrical $46,0002.3%
Inside Stairs$20,000 2.3%
Drywall $42,0004.9%
Tile and Stone plus Labour $20,0002.3%
Crown Moulding $12,0001.4%
Hardwood $30,0003.5%
Finish Carpentry and Material $50,0005.9%
Cabinet $65,0007.6%
Roof $12,0001.4%
Counter Tops $9,0001.1%
Appliances $30,0003.5%
Lights and Chandeliers$10,0001.2%
Land escaping $25,0001.8%
Fence and Deck $15,000 1.8%
Railing $15,000 1.8%
Clean up during Construction$6,0000.7%
Garage Door $2,5000.3%
Main Door$5,5000.6%
Sprinkle System $2,0000.2%

Note that these price approximations are done for luxury homes in the 3,000 square foot range. If your expected build is going to be near that price, you can comfortably use these assumptions to guide decisions. If you’re building a custom home that is larger or smaller than 3,000 square feet, you’ll need to adjust accordingly to ensure that your budgets and plans are better aligned with the project specifics. Here are a few more details on some of the important elements:

  • Land – The size of the land you purchase will have a large impact on the price paid. Because land is becoming increasingly scarce throughout the city, province, and country, there’s a high price tag associated with larger plots.
  • Location – Location is king. Having a home that is well-situated in a nice neighbourhood and near vital amenities will carry a hefty price tag.
  • Fees, Permits, and Inspection – The administrative costs associated with preparing your home for development are not included in the purchase price of the land, and for as much of a pain as they may be, they’re incredibly important to ensure that you’re able to successfully build your home.
  • Home Levels – Deciding between various home levels will weigh heavily on your total cost of development. Bungalows – one-story homes – are much cheaper to develop than multi-story homes, however, the space limitations in Toronto make multi-level homes an overwhelming favourite for those in need of lots of space.
  • Materials – As with anything, you can complete your custom luxury home build through an affordable or expensive route depending on the materials selected. With so many options available for virtually every aspect of your home, you’ll need to consider what items mean the most to your family and budget accordingly.
  • Square Footage – With homes being priced out on a per square foot basis, the size of your home will have a direct impact on the overall development cost. For deciding on how large to go, consider the space requirements of your family over the next five to ten years.
  • Home Style – Varying home styles will bring about vastly different budget requirements. Consult with your builder to determine which house plans are best for you!
  • Hiring a Builder vs. Building Yourself – The decision of whether or not to hire a professional builder will have a major impact on the total cost of the project, as builders will require compensation for the time and effort they put into the project. If you’re capable of building without professional support, consider it as an option, however, it’s certainly advised that you seek the expert insights required to ensure the home development goes well.

Smaller Homes Are Not Always Smarter

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When building a house in Toronto, you want to be sure that you’re creating a space that you and your family can grow into and spend decades at without frustration. Although smaller luxury homes will present more attractive price tags and shorter build times, they may not always be the best route depending on the space needs of your family and your long-term growth plan. If you are working with a smaller plot of land and are unsure of how to create a large enough home for your family to grow into, it’s certainly worth considering the options of building up – with 3, 4, and 5 story homes now becoming very popular throughout the city of Toronto for this very reason.

Additional Factors of Pricing a Home

Aside from the above cost considerations, there are a few other key factors that you’ll want to keep in mind when pricing out your custom Toronto home. They include:

  • Site Conditions – Depending on the quality of the site that you purchased, additional work may be required to clear, grade, and prepare the land for building a house. This work is an additional cost to the project, and should be considered prior to the purchase of a property that may be in need of more work than you’re willing to sign up for.
  • Time of the Year of Build – Toronto is notorious for cold, snowy winters, and unfortunately, it’s slightly more difficult to develop a home in these conditions. Depending on when you plan on building your home, you should consider both the cost increases and project delays that accompany cold weather. If it’s possible to break ground in the spring and see development occur throughout the summer and fall – depending on the size of the project – that would be the ideal route to take.
  • Architect and Designer Fees – An incredibly important, but often overlooked price and project consideration are the architectural and design fees associated with the design of your custom home. These professional services will ensure that your home is beautiful both inside and out, and although pricey they are a critical step in the process.
  • Extras (Modifications During Build) – As you work through the development of your custom home, it’s inevitable that modification and adjustment requirements will present themselves. Each project modification along the way will add both time and labour, increasing the total cost of the project. It’s advised that you try and avoid these – sticking to the original house plans – but just be aware of the cost considerations of deciding to act on impulse.

Production Home vs. Custom Home

When looking at your house construction options, it’s important to consider the differences between production home builders and custom home builders.

Production home building are typically major development companies that create large-scale, systematized construction projects. The production builders (otherwise known as volume builders) are attractive to home buyers because of the multitude of (often elegant) flooring and house plans that have already been designed, priced out, and are prepared for development. These home builders offer an affordable, accessible way to get a semi-customized home that offers tremendous value.

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Unlike production builders, custom builders will offer the ability to customize each and every element of the project, working to create a truly unique home for you and your family. Once construction begins with a custom builder, it’s still possible to revise the floor plan, make adjustments to the development, and customize further. If you’re looking for a home that is 100% unique to you, a customer developer will likely be the better route.

In addition to the benefit of complete home personalization, custom builders also generally provide higher quality service throughout the process. Because most custom builders are hands-on local contractors, priding themselves on quality, craftsmanship, and uniqueness, you can rest assured that all of their focus is on building a beautiful home for you. You’ll also have the ability to work closely with them on the design and execution of the project, providing constant input and feedback throughout the process.

How to Reduce the Cost of Building a House?

With so many home developers around and so many project variables involved, there are plenty of ways to make building a house more affordable. Below are a few of the best ways to contain costs while building a custom Toronto home:

Cost of Building a House

Take Bids & Quotes

Before deciding to go with a specific builder, get a variety of quotes and project bids. By presenting your idea to a handful of developers, you’ll be able to see which is the most excited for the project and which is willing to do it for the most reasonable price.

Custom home architectural drawings

Design a Smaller Home

The easiest way to contain house construction costs is to simply design and build a smaller home. By reducing the square footage of the space, you’ll be able to reduce both labour and material costs, keeping the project well within your set budget.

Custom living room from black pearl custom homes

Consider Lifestyle

Think about the kind of lifestyle you’re hoping to create and design a home around that. Don’t spend additional money on items that aren’t relevant to your situation, and don’t fall into the trap of thinking that you need to have absolutely everything available simply because others may.

Save on Aesthetics

Don’t overspend trying to create a modern aesthetic that aligns with industry trends. Plenty of dollars can be saved both in the short-term and long-term by focusing on traditional, fundamental building and design principles.

photo of people shaking hands for agreement- custom home builder mississauga

Lend a Hand

You may be able to reduce the total development project cost by finding ways to assist in the process. Where possible, try to lend a hand to your builder and save the price of additional labour.

The Art of Negotiation

No matter what material you choose, nothing is ‘set in stone’. Be prepared to negotiate every aspect of your build, from broker fees to building materials. This is your custom dream home and you want to be sure every detail fits your overall vision. If you want a marble kitchen, ask your builder if you can get a better rate on materials if you also do the bathrooms in marble. Volume discounts, particularly on larger homes, are a great way to get the final look you want. So be willing to take the time to negotiate.

walk in shower in custom bathroom build by black pearl custom home

Don’t Skimp on Important Details

Your custom home will be a space for your family to live and grow for many years to come, and for that reason you want to be sure to build it in a way that is both beautiful and timeless. Spend less on trends and more on the important elements like flooring, kitchens, bathrooms, and the like.

Long Term Vision

Amazing Kitchen Design - Custom Homes Mississauga

A home is an investment, so think ahead to how you see yourself using your home five or 10 years down the road. The more custom features you add today, the higher the potential resale value in the future.

Do you want children? Do you plan on having in-laws visiting regularly? Discuss your long-range plans with your builder so they can be worked into the overall design. Perhaps you want an office now that will be converted into a baby’s room in 3 years? Discuss closet space for baby so it can be built-in now, rather than retrofitted later when it may cost more.

How Long Does It Take to Build a House? How Long Does It Take to Build a House?

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Custom home development projects are incredibly complicated, and as such, it’s difficult to accurately estimate the amount of time it will take to complete. That said, you should expect an average development time of between 10 and 16-months. This time allotment doesn’t include the time it will take to clear and grade the land, and it doesn’t consider any delays (both minor and major) that may occur throughout the process.

Communicate with Your Builder

Design and build services

Take the time to talk to your builder. Discuss the entire building process components from property lines to kitchen finishes. This will help you understand all the costs to expect through the building process. At a minimum of $285 sq. ft., a 3,000 sq. ft. home can cost approximately $700,000, before adding upgrades and add-ons.

Once you have an idea of all the costs involved, then review your budget. Make sure to discuss all the details that matter most so you can work out a complete cost breakdown.

Cost Of Land for Custom Home

This handy checklist will help you get started:

  • Cost of Land
  • Land Transfer Tax (0.5% to approximately 2%)
  • Legal Fees
  • Permit and Inspection Fees (current City of Toronto rate is a minimum fee of $198.59 with an hourly fee of $85.79 for examination and inspection.)
  • Architect Fees
  • Broker Fees (the current average fee in Toronto is 5%)
  • Landscaping

Can I Get a Loan to Build a House?

Custom home exterior design in Vaughan

When it comes time to finance your custom house construction, you’ll have the ability to apply for either a home construction loan or a self-build mortgage. Both of these loan types will provide you with the money needed to purchase land and develop a home (or just develop a home, if the land is already owned) within a set timeframe.

Because of the nature of the project, most lenders will require a 25-30% down payment, much higher than that required for the purchase of a traditional home. The construction mortgage will be backed by the land plus improvement value, meaning that if you’re unable to make payments on the loan and default, the bank will be entitled to the property you own in addition to any additions you’ve made to it.

Custom Home Build by Black Pearl Custom Homes

When considering home development loans, there are two key types available:

  • Completion Mortgage – These mortgages won’t be transferred until the project is complete. This means that you’ll have the ability to revise the loan as often as needed – depending on various development factors – up until 30-days prior to taking possession of your home.
  • Draw Mortgage – These mortgages will roll out the loan in increments, with the builder only receiving funding once various inspections or other requirements have been met. The lender will calculate the total mortgage amount by determining the total value owed to the builder and then disperse it over several increments.
custom dining room with build in backlit shalves

Prior to actually being approved for any of the mentioned mortgages, you’ll need to go through a standard review and approval process. It’s important that you begin to consider your mortgage requirements for the project and ensure that you’re capable of being approved for the amount necessary prior to jumping in!

With years of experience in the custom home design and development space, Black Pearl Custom Homes is ready to help you build the Toronto home of your dreams. Whether you’re ready to dive into a custom home design project, or you’re simply looking to learn more about the options available and discover the possibilities, get in contact with our team!