Home Construction Budget
Preparation of home construction budget is a tedious job. There are lots of item of works are to consider during budget making. Budget is not a constant entity. It keeps on changing during the construction phase. A precise budget depends on good skill and experience of the person making it. In most cases it has been seen that cost of building overruns the budget. This is because when the budget was framed, many items of work were not considered or overlooked. Practically, construction site is a eventful place. Unexpected events happen here occasionally. There are so many of unforeseen tasks or events which may come across during the execution process.

So, during preparation of home construction budget one has to visualize the all possible aspects minutely which may occur during the construction phase and include the cost in the budget. Secondly, the timeline. It is a great factor, if the timeline is increased the budget also increase due to increase in labour and material cost. Thirdly, mistakes and bad workmanship which may hit the budget badly if rework is to do.So, home construction budget not only depend on precise planning but also on good monitoring of construction work.

Home Construction Budget
Let us try to know the easy way to make a budget. A home construction budget basically depends on five major tasks. These are further subdivided into different parts. (see item no. 3 & 4).

1. Cost of land with legal expenses etc.
2. Cost of planning, Architect's fee and plan approval charges etc.
3. Cost of building structural work.
4. Cost of buildings' finishing work.

Home Construction Budget
5. Cost of interior works like furniture etc.

The cost of land depends on shape of land, size of land, location, front road width and other facilities like nearest market,nearest hospital,nearest railway station,nearest airport,nearest bus stop and present demands of land in that particular area etc. So,one has to select the location according to their choice and budget. if choice of location is finalized then decide what size of land is required. Assume we need to construct a home of G+1 storey with total covered area of 2000 sq.ft., the minimum land area will require 2000 sq.ft. approximate ( 50% built up area + 50% open area).Now the prevailing rate in that area is, say INR 900 per sq.ft then the cost of land will be                      = INR 18,00,000
Cost of legal expenses @ 7% of land cost    = INR 1,26,000

Total Cost of land                                     = INR 19,26,000

The Architect's fee depends upon their popularity. A well known famous Architect's charge is always higher. But other Architects or Planners also do better and their charges are low. One can choose their Architect as per their choice but make sure that their services should be good. Many Architect delays to give drawings in time which hampers the progress of construction work. In general, Architect charges around @ INR 60.00 per sq.ft. of sanction area including plan approval charges and other charges etc. However, different Architects charges may vary as per their services. Considering INR 60.00 per sq.ft. the charges for 2000 sq.ft. it becomes INR 1,20,000.00

The cost of structural work and finishes are considered on percentage basis about their contribution to the total cost of construction. That percentage can be used to prepare a home construction budget for
arising an approximate expense of each item of work.

Home Construction Budget

  • Foundation work up to plinth level -------------------- 11.0%
  • Brick work ------------------------------------------------- 13.5%
  • Concrete work (R.C.C. work) --------------------------- 14.5%
  • Internal and External plastering work ------------------ 6.0%
  • Compound wall, external developments etc. ----------3.0%

  • Flooring works --------------------------------------------  11.0%
  • Plumbing and sanitary works ---------------------------  11.0%
  • Electrical / HVAC works --------------------------------     7.5%
  • Internal and External painting works ------------------  10.0%
  • Doors, Windows and MS grill works etc. -------------     7.5%
  • Others miscellaneous expenses -------------------------   5.0% 

The cost of furniture like beds, dining table, wardrobe, TV unit, sofa and other furnishing items etc. depends on their types and materials used. Wooden furniture costs more. However, furniture costs may vary in between INR 120.00 to INR 350.00 per sq.ft. of covered area. Here, we consider moderate types which comes around INR 150.00 approximate. Therefore the furniture cost @ INR 150.00 per sq.ft. for covered area 2000 sq.ft. is INR 3,00,000.00

Home Construction Budget


Firstly, we have to collect the prevailing market rate for cost of construction in that locality. This cost includes all structural and finishing items cost together. It is easily available by asking local builders, contractors or people who recently build their own home.Generally, It is about INR 1200 to INR 1400 per sq.ft. depending upon the area. In rural area it is lower and city area it is higher. Let us consider the rate be INR 1400 per sq.ft. Now if we want to construct a home of 2000 sq.ft. built up area, the total cost of construction will be 1400 x 2000 = INR 28,00,000.

The grand total cost is ( item 1+2+3&4+5)= 19,26,000+1,20,000+28,00,000+3,00,000= INR 51,46,0.0000

So, the overall home construction budget for constructing a duplex home on a land area of 2000 sq.ft. having built up area of 2000 sq.ft. is INR 51,46,000.00

Break ups for item 3 & 4:

  • Cost of construction of foundation work up to plinth level  = 28,00,000 x 11.0% = 3,08,000
  • Cost of Brick work for complete structure                         = 28,00,000 x 13.5% = 3,78,000
  • Cost of all concreting work                                                = 28,00,000 x 14.5% = 4,06,000
  • Cost of Internal and External plastering work                     = 28,00,000 x   6.0% = 1,68,000
  • Cost of Compound wall, external developments etc.          = 28,00,000 x    3.0% =   84,000
  • Cost of Flooring works                                                       = 28,00,000 x 11.0% = 3,08,000
  • Cost of Plumbing and Sanitary works.                                = 28,00,000 x 11.0% = 3,08,000
  • Cost of Electrical / HVAC works.                                        = 28,00,000 x  7.5% = 2,10,000
  • Cost of Internal and External painting works.                      = 28,00,000 x 10.0%= 2,00,000
  • Cost of Doors, Windows and MS grill etc.                            = 28,00,000 x  7.5% = 2,10,000
  • Cost of others miscellaneous expenses.                              = 28,00,000 x  5.0% = 1,40,000

Home Construction Budget


Now, we have got the budget of each items separately and it has to be controlled during construction phase from very beginning. It should be monitored regularly so that it cannot exceed their limit.
But how to do that? o.k., the above each item budget is included all labours, materials and other miscellaneous cost. 
Materials cost is considered about 55%
Labours cost is considered about 37%
and miscellaneous cost is about 8%

Now, bifurcate all the items by this percentage basis.Thus we will get the cost of labours, materials and other expenses separately for each item. For example, the above said G+1 duplex building's total budget is INR 51,46,000.

So, the bifurcated costs are,
Total budgeted materials cost = 51,46,000 x 55% = 28,30,300
Total budgeted labour cost     = 51,46,000 x 37% = 19,04,020
Total budgeted misc. cost       = 51,46,000 x 8%   = 4,11,680

Now, try to restrict all materials procurement cost within INR 26,88,785, all labours cost within INR18,08,819 and all misc.cost within INR 3,91,096 which are 5% less than their budgeted cost.

Another way is to complete the each items of work at 5% less than their budgeted cost as mentioned in "Break ups of items 3 & 4". This will be more precise and more monitorable.
Try to complete each item of work within 5% less from the budgeted cost of that item. And do this practice to all the items. This 5% will act as a cushion. In this way we may save some cost in some items. But some items can cross their budget limit by certain amount, so overall limit should be remain same or less than the budget. If  any item exceeds the budget then it should be verified and necessary adjustment is to be made in the budget. But target will always be to complete each item of work below 5% of their budgeted cost. In this way we can control the expenses. Thus, we can complete the project within the budget.

Hope this article may help you to make home construction budget easily.


Green Environment

Hi, I’m Gobinda Burman (Green Environment). More than 27 years in the field of Building Construction industry, I’ve completed many high-rise building projects successfully. I have got the opportunity to learn and solve the critical practical problems related to building construction. I love to share my knowledge with those people who wants to build their own home and the budding civil engineers willing to build their career in this field..

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