Toys are piling up, your teenager needs more privacy, you’re waiting for a new baby to arrive – these are just some of the many reasons people want to add an extension to their homes, or perhaps move. How can you decide between these two options, in order to get the extra space you need? Several factors must be considered. For example, is your budget sufficient for a home extension? Can you afford a bigger house in your current neighborhood? Can you increase the current value of your home?
Questions to ask yourself before deciding
How much space do I need?
Firstly, you must make a list of your needs. Adding a room or a story can be doable, but if you want to triple the livable space of the house, it is better to consider moving to a larger one. Not all types of home additions are allowed, and an increase in the value of your home is not guaranteed.
Does my municipality allow home extensions?
Contrary to popular belief, you cannot begin a home addition project without first obtaining a permit. There are many rules to follow, to preserve ecological systems, uniform urban planning, among others. For example, it is often forbidden to extend towards the front of the property line, so you would need to opt for a side extension or story addition. If you have a garage, adding square footage above it is a simple option to obtain permits for.
Useful links to learn about bylaws and apply for permits:
Establish the cost of each option
The costs of a house extension
Getting a return on your investment is always the goal. A well-executed home addition will almost always increase the value of your home. To get the most value on your investment, evaluate the homes in your neighborhood that have the number of square feet that your home will have in the end. Each type of home addition has its price per square foot. It’s important to weight the cost of the addition against the value it will add. For example, a lateral extension on the foundation is more expensive than an extension on piles or on a concrete slab. Below are the main home addition types:
|Average Cost (incl. materials and labour)||Average Cost (incl. materials and labor)|
|Story Addition (gross)||$100 to $130/sq ft.|
|Story Addition (turnkey)||$145 to $180/sq ft.|
|Garage Addition (gross)||$85 to $115/sq ft.|
|Garage Addition (turnkey)||$120 to $150/sq ft.|
|Extension on Piles (gross)||$110 to $130/sq ft.|
|Extension on Piles (turnkey)||$140 to $180/sq ft.|
|Extension on Foundation/Slab||$125 to $175/sq ft.|
|Extension on Foundation/Slab (turnkey)||$170 to $220/sq ft.|
To learn more, see our full article: Home addition cost.
The cost of moving and buying a property
Moving and buying a property involves a lot of different costs. See below the most significant ones to consider (for the city of Toronto):
|Elements To Plan For||Average Cost|
|Welcome tax||Up to and including $55,000.00 X 0.5% of total property value
– From $55,000.01 to $400,000.00 X 1% of total property value
– Over $400,000.00 X 2% of total property value
|School and municipal taxes||Varies depending on the municipality and value of the house|
|Sales taxes (if the property belongs to a company or is a new construction)||13% of the value of the house|
|Mortgage insurance (if the down payment is less than 20%)||1.8% to 4% of the total borrowed sum (mortgage)|
|Related expenses (furnishings, décor, etc)||Varies greatly from person to person|
Desjardins checklist to remember all the start-up cost when buying a home.
Advantages and disadvantages of each option
If you decide to opt for a home addition, you should know that it is a lengthy process with many steps, that will extend over several months. It includes but is not limited to the following: obtaining a permit from the city, assessment of the feasibility of the project by an engineer, drawing of a plan by an architect or technologist, search for contractors, meetings with potential contractors, obtaining quotes and choosing a contractor, carrying out the work, and finally, receiving the completed work. In addition, while the work is in progress, your house may not be completely accessible, depending on the size of the extension.
Furthermore, you may take advantage of this large-scale project to turn your floorplan into an open concept. Changing the configuration of large space can help reimagine the overall square footage, and allow for better use of existing space. If you choose to add an extension, don’t fall for the 5 common mistakes when extending your home.
When it comes to buying, you should also consider the time it may take to find a home that fits your needs. You may get lucky and find one very quickly, but if you have very a particular and detailed list of must-haves, it may take months to find a new home. You may find yourself looking outside your current neighborhood, which comes with the uncharted territory to explore and understand. There is always some risk involved in buying real estate that you do not know, hence the importance of an exhaustive inspection. When buying a new home, don’t forget to calculate legal fees, transfer fees, and moving costs. These costs are not recoverable, unlike an investment in the renovation. It is also very possible that your new home will still require renovations to have it just to your liking.
Choose the best solution for you
Unfortunately, there is no easy answer to our initial question. You must assess your needs and discover the best solution for yourself. If you love your current neighborhood, for example, it is better to consider the option of a home addition. On the other hand, if the additional square footage you need is too large and would require a major investment, it would perhaps not increase the value of the house proportionately.
If you choose a home addition, we can refer you to 360° Verified Contractors to help you in your process. Our Contractors have all passed through our exhaustive verification process. We diligently check licenses, insurance, creditworthiness, legal history, and much more. Furthermore, we will put up 3 Contractors to submit quotes, so that you can rest assured that you are getting a fair price. Ready to start? Fill out a form or call us.