Renovate or Move: Reasons to Build a House Addition

couple looking at plans and a computer

Your teenager needs more privacy, you need a dedicated home office, your partner(s) are moving in, you’re expecting a child… whatever the reason, you need more space and you’re not sure whether to renovate or move. Investing in a house addition or extension would allow you to stay in the same neighbourhood, but moving lets you start from scratch without having to deal with construction. Both require a fairly large budget to make work, as well. There’s a lot to consider, so let’s go over the basics.

Questions to ask before building a house addition

How much space is needed?

First, you make a list of your needs. Adding a room or a storey can be doable, but, if you want to triple your square footage, then moving to a bigger house would be your best bet. Keep in mind that while there’s a good chance a renovation project will increase the value of your home, it’s not guaranteed.

Does the municipality allow home extensions?

If you want to go through with a house addition or extension, you will need to get a permit. Many municipalities have rules in place regarding what can and can’t be done. For example, some regions may not allow homes above a certain height while others don’t allow front extensions. On the plus side, it’s usually pretty easy to get a permit for adding a storey to your garage.

Here are some useful links to city bylaws and permit applications in the Greater Toronto Area:

Is it worth it to add on to your house?

Whether you’re opting to renovate or to move, you want to make money off of your investment. A lot of it is dependent on market rate, but there are some things that increase home value more than others. Let’s go over the costs of a house addition and the fees associated with selling your house.

House addition costs

Getting a return on your investment is always the goal, and a well-executed house extension will almost always increase the value of your home. To get an idea of what to expect in terms of ROI, check out the costs of homes in your neighbourhood. Pay attention to those that have roughly the same square footage as your home post renovation.

Of course, home additions and extensions can add a lot of space and value to a home. If you’re considering renovating, here’s a list of the most common projects and their price points.

Type of project Average cost (materials and labour)
Storey addition (gross) $100 to $130/sq. ft.
Storey 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 (gross) $125 to $175/sq. ft.
Extension on foundation/slab (turnkey) $170 to $220/sq. ft.


home addition 2 storeys

The cost of moving and buying a new house

Buying and selling a property comes with a lot of different costs. Here’s a summary of the biggest ones in the Greater Toronto Area.

Notable costs and fees Average cost
Property evaluation $400–500
Property inspection $500
Notary fees $1,000
Welcome tax

Home value up to $55,000

  • Tax = Value X 0.5%

Home value from $55,000.01 to $400,000

  • Tax = Value X 1%

Home value over $400,000.01

  • Tax = Value X 2%
School and municipal taxes Depends on municipality and home value
Sales taxes (if the property belongs to a company or is a new construction) 13% of home value
Mortgage (if the down payment is less than 20%) 1.8% to 4% of the total borrowed sum
Moving fees $1,000–2,000
Moving expenses (furnishings, décor, etc.) Varies greatly from person to person


Worried that you’ll forget something when buying a new home? Here’s a handy summary of the costs.

relocate to a new house

To renovate or to move: Pros and cons

If you really love your house, a home addition is an opportunity to make it even better. As with any major renovation project, there are lots of steps involved, such as getting permits and hiring contractors, architects, and engineers. There are a few things you can do to make the process easier, of course. That said, be prepared to invest time and energy into navigating the construction process, finding the right professionals for the job, and avoiding the common pitfalls of house extension projects.

Remember that you can do a lot more with this renovation than simply adding a new room or storey. For instance, you can take advantage of this project to create an open concept floorplan and make better use of the existing space. Removing a non-load-bearing wall or two can dramatically transform a room and make it feel larger and brighter!

If you can’t or don’t want to renovate, then moving may be your only option. It might take a while to find a home that fits your needs – it mostly depends on the market. You might get lucky and snatch up your dream home quickly, or you might be stuck waiting several months to a year to find something that works for your family. The more particular you are, the harder it’ll be to find the right house.

Keep in mind that you may not be able to find a house in your current neighbourhood. There are always a few risks that come with shopping around in unfamiliar territory, so be sure to do some research and ask around. Also, get an inspection done before finalizing any purchase to avoid unpleasant suprises. 

pros and cons of an home addition vs relocation in a new house

Choose the best solution for you

Deciding if you should renovate or move can be tough, but it ultimately comes down to your needs. If you love your current neighbourhood and don’t really want to move, then a house addition is your best bet. If the amount of extra space you need is simply too much for your structure to handle or is too big of an investment, then it’s probably better to look for a bigger house.

No matter what you choose, we’re here help. If you want to learn more about home additions, be sure to check out our comprehensive guide. Looking to buy or sell your property? Our partner FairSquare can help you out.