Home renovations made simple
If you own a home, there comes a time when you will consider renovating it. Perhaps you’ve outgrown your current space, need to make your home more accessible to allow aging in place, or just want to maintain the beauty of what you already have. Regardless of why you’re considering changes, the most pressing question tends to be: How much will it cost to renovate my house?
Since your home renovation cost depends on many factors, there’s unfortunately no simple answer. Do you seek a budget-friendly update to make your home more attractive for a potential sale? Or a high-end makeover with the best-quality materials available? Maybe something in between?
These days, home renovation costs are extra challenging to nail down because of current supply chain issues, fluctuations in the price of materials, and increased demand for renovations, which grew significantly during COVID as Canadians nested in their homes and spent more on them.
In just two years, Ray Koehler, owner of Koehler Masonry and Home Improvements, which operates in Brant County, Ontario, estimates the cost of materials alone jumped by anywhere from 75 per cent to 200 per cent, while labour costs increased by 10 per cent. “Things change so quickly now,” he says. “I’ve seen the cost of some items double over the course of a weekend. It makes preparing quotes for customers especially challenging. Because of the current volatility, a quote is only good for a week. After that, the prices are no longer valid and need to be redone.”
He also notes challenges to supply chains are having major impacts on renovation timelines, with longer wait times for some materials. Even certain paint colours (such as blue) are now more difficult to source as the raw materials needed to create them become scarce. For home renovators, this means building more time into their schedules.
Why is it important to renovate your home?
What we need and want from our homes will change throughout our lives. A growing family with young children may need extra bedrooms and larger communal spaces, while an empty-nester couple might prioritize improved accessibility to enable aging at home. The reasons to renovate are as individual and personal as homeowners themselves.
Why renovate? Some of the most common motivations include:
Changing lifestyle needs
Life is always in a state of flux. As such, what you need out of your home will shift. During the pandemic, the need for home offices rose sharply, as did the demand for soundproofing and creating private spaces, like dens, sheds turned to studios. Young families require room to grow, while those with teens want places for them to hang out, like finished basements and recreation rooms. Older couples make changes to their living spaces so they are safer and more accessible.
Modernizing and improving home comfort
Design preferences change over time. Your country kitchen may seem tired and outdated now that trends lean toward industrial chic looks with sleek modern finishes. Or you may feel your wall-to-wall carpeting makes your home look older than it is and want to consider hardwood flooring as a fresh-looking option. Boredom is a factor, too. Sometimes you just need a change. Home buyers also often look for ways to personalize their newly purchased homes and renovate them according to their own tastes.
Read more: The pros and cons of smart home renovations
Well-loved homes can take a bit of a beating over time. Floors get worn, cupboards no longer close properly, and equipment, like furnaces, no longer function at peak efficiency. Fixing those issues and making sure an older home meets updated building codes are two good reasons for home renovations.
Better energy efficiency
Rising heating costs have underscored the importance of making sure your home is as energy-efficient as possible. If your home always feels chilly no matter how high you crank your furnace, it may be time for some updates. Most heat is lost through the roof, so you’ll want to ensure your attic is well insulated. New energy-conserving windows and doors also help, along with bulking up the insolation in the walls. Homeowners may also choose to adopt greener technology, like tankless water heaters and solar panels.
Read more: Understanding the Canada Greener Homes Grant
Increasing the value of your property
If you’re considering selling your home in the near future, strategic home renovations can help you get the best possible price. Everything from a fresh coat of paint for all the rooms in your house to updating the kitchen and bathroom can entice potential buyers and get them to make an offer. (See “Will your renovation pay off?” below.)
Which one of these is the top reason for home renovations? “About 70 per cent of my clients are looking to update their homes,” says Koehler. “For example, some want to replace wood-burning fireplaces with gas inserts and add stone surrounds. The second most common reason to do renovations is the desire to sell their homes and get the best price possible. And third, many people moving into a home want to personalize it and make it their own.”
How much does it cost to fully renovate a house in Canada?
Given the volatility in material costs and labour shortages, many contractors are reluctant to provide a home renovation cost per square foot. But to get the budgeting process started, a new addition or full house renovation costs around $650 to $900 per square foot, whether it’s for a townhouse, condo, or detached home. For very basic renovations, including new flooring and painting, expect to pay around $150 per square foot. Add things like trim, plumbing, or electrical updates and your renovation budget escalates quickly.
Average cost of popular home renovations in Canada
How much will your house renovation cost? It’s complicated. There are so many factors that impact how much you’ll pay to get work done on your home, including its age, size, current condition, the complexity of the project and time needed for completion, quality of materials and finishes, and any required permits and fees. Where you live has an impact, too, as labour costs and materials vary across the country.
With that in mind, here are some average costs for various types of home renovations in Canada:
|Type of Renovation||Cost|
|Kitchen renovation:||$25,000 to $50,000+|
|Exterior work (siding, brick, foundation, etc.):||$1.80 per square foot and up|
|Bedroom||$3,000 to $10,000|
|Windows:||From $250 each (double hung) up to $5,900 (multi-pane bay window)|
|Roofing:||$2.75 (asphalt) to $38 (slate) per square foot|
|Home extension/addition:||$200 to $475 per square foot|
Another great resource is Smart Reno’s home renovation cost estimator tool. Just input a few basic details, like room size and the materials you have in mind, to get a general idea of what your renovation budget should be.
Factors to consider for your home renovation budget
When creating a renovation budget, start with a wish list of what you’d like to see in the end result. What materials would you like? What kind of fixtures, trim, finishes, and flooring do you prefer? Find inspiration online, in books, and magazines. Make a list with specifics, like the tile, countertop, sink, or flooring type you’ve chosen. Then get prices for those elements. When you’ve nailed down some of these details, it’s time to talk to a contractor.
“The more specific a homeowner can be about what they would like, the better we can provide them with a more accurate cost for their renovations,” says Matt Dawson, a contractor and co-owner of Construction 3M, in Morin-Heights, Quebec. “We can determine whether the budget is realistic based on our experience.”
When it comes to choosing materials, he recommends homeowners choose good-quality materials and avoid the temptation to opt for the cheapest ones available. Chances are, the most inexpensive items will not last and you’ll end up incurring costs when you have to redo renovations. Any initial savings from buying cheap products are short-lived.
Dawson also suggests having contingency funds in your renovation budget for unexpected costs: “You just never know what you’ll find behind walls. Perhaps unsafe wiring, mold, poor insulation, asbestos, rotting wood, or termites. Those are things you can’t see until the work starts.” To plan for unforeseen costs, take your budget and increase it by one-third. This unknown factor is one reason why contractors won’t provide fixed costs for any home renovation.
Homeowners should also allot time and funds for the removal of existing features –– everything from carpeting and walls, to countertops, cupboards, and plumbing. “I often see homeowners underestimate how much time it will take for the tear-down stage,” he explains. “If you’re, let’s say, removing tiles, they might come off easily or you may have to take down the plywood backing to get them off. That time adds up.”
And here’s one more under-the-radar cost to note in your renovation budget: provincial and federal sales tax, which might add as much as 15 per cent to your renovations (material and labour), depending on where you live and current tax rates.
Read more: How to budget for a home renovation
Decide on your top renovation needs and priorities
Perhaps you have a long list of renovations you want and/or need to have done. Where do you start? First, tackle any projects related to preserving the value, safety, and functionality of your home. This could include roof repair, eavestrough replacement, basement waterproofing, foundation cracks and electrical/plumbing issues, as well as anything that allows water into your home and causes damage.
Once those problems are addressed, move on to time-sensitive and pressing projects. Maybe you need extra room for twin babies on the way, or are ready to list your home for sale because you’re starting a job in another city.
Then switch gears from home renovations you need to those that you want to boost the enjoyment and comfort of your living space. Those projects might include an updated kitchen, an en suite bathroom, a finished basement, a solarium, a wine cellar, a swimming pool, or a backyard deck and landscaping.
If you still feel unsure about your priorities, talk to your contractor. They are there to help you and share their expertise. “Sometimes, we can tweak projects to make them more cost-effective,” says Benjamin Heninger, a professional engineer and owner of Groon Construction in Calgary. “That’s the value a good contractor with experience can bring.”
He emphasizes that communication between contractor and client is critical for any project, from discussing what level of finish is wanted (budget, luxe and everything in between) to ways to keep costs in line. “It makes more sense to ensure clients are not spending any more than they have to,” he explains. “I try to reduce costs and be as efficient as we can.”
Home renovators should be prepared to pivot and have backup choices for materials. “Some higher-end products have not only cost implications but time ones, too,” points out Heninger. “Due to supply chain issues, you may have to be prepared to wait anywhere from six to 12 weeks for them to become available.”
Will your home renovation pay off?
You may wonder whether putting money toward a home renovation is worth it. When you drill down on return on investment (ROI), some renos like basement renovations stack up better than others. When trying to determine your priorities, consider renovations that offer the best ROI first, shown here with their recovery rates (i.e., the percentage of renovation costs you’ll likely recover upon the sale of your home), according to the Appraisal Institute of Canada.
|Type of renovation||Recovery rate|
|New or improved kitchens and bathrooms||75-100%|
|Low-cost improvement (painting, wallpaper, new rugs)||50-100%|
|New windows and doors||50-100%|
|Investment in improving energy conservation||60%|
For example, if you spend $10,000 on a bathroom renovation, you’ll typically get $5,000 to $7,500 of that amount back in the purchase price of your home. If that same $10,000 was spent updating a kitchen, you can usually expect the value to be $17,500 to $20,000 when you sell your home. This underscores how important it is to spend strategically.
Although renovations may seem expensive, the cost is often far less than buying your dream home elsewhere when you factor in real estate fees, land transfer taxes, and moving costs.
How to finance your renovations
Even if you put away a bit of money each month to cover your home renovation costs, it may not be enough. If this is the case, consider financing your remodelling project. You have a number of options available, depending on the size and cost of your home renovations.
Financing options for small renovation projects
For small to medium renovations, a line of credit is a low-cost way to finance projects that take a longer time. Payments can be made in installments. When you need to pay a large amount upfront, for materials, for example, a personal loan may be the best route. Personal loans are paid off with fixed monthly payments over a specific period, and terms range from one to five years with fixed or variable rates.
Financing options for large renovation projects
For larger projects, like building an addition or renovating multiple rooms, consider using a secured line of credit. It leverages the equity in your home or your investment portfolio as collateral to secure a higher credit limit at a lower interest rate. You can also finance the cost of renovations with the RBC Homeline Plan®, which helps you manage a mortgage and line of credit under one plan and use the equity in your home to finance those bigger renovation projects.
You can learn more about how to finance your home renovations and other financing options through Smart Reno and RBC.
Government grants and tax credits
Taking advantage of government grants and tax credits can also help you soften the cost of renovations and stretch your renovation budget further. They’re usually available for a limited time and certain conditions must be met, but they are worth checking out. Ask your contractor, tax advisor/accountant, or financial institution about current offerings.
Multigenerational home renovation tax credit
Make note of the newly announced multigenerational home renovation tax credit from the federal government. Starting in 2023, it will be available to families who renovate their homes to allow a senior or disabled relative to live with them. You can claim 15 per cent of up to $50,000 of eligible renovation expenses, for a maximum refundable tax credit of up to $7,500. Details will be posted on the Canada Revenue Agency website.
Federal home accessibility tax credit (HATC)
Homeowners over the age of 65 or who live with disabilities, and who have renovated their home to make it more accessible, may be able to claim a federal home accessibility expenses tax credit. You can make claims for up to $20,000 of eligible expenses.
Tax credits for eco-friendly home renovations
Several provincial governments also offer tax credits worth exploring for older homeowners and eco-friendly/green renovations. For example, British Columbia, Ontario, and New Brunswick all have tax credits for seniors who upgrade their homes and making them more accessible. Manitoba has a tax credit for green energy technology (like geothermal heat pumps and solar thermal energy systems) and Newfoundland allows deductions for the cost of renovations related to primary residences. If they save you money, they are worth investigating.
Choose the right contractor
Finding the right person for the job is a crucial step. Your diligence now will save you hassles down the road. Ask friends, family, and neighbours in your area about qualified contractors they used for their home renovations and get feedback. Compile a short list of potential contractors and begin the process of asking for quotes in writing (try to get at least three separate quotes).
Your early interactions with a contractor will reveal much about their approach to business and their professionalism. Do they respond to requests in a timely manner? Do they show up as promised? Do they understand what you’re trying to achieve and offer helpful suggestions to stay within your renovation budget?
Price should never be the sole factor upon which you base your decision. The provider who offers the cheapest quote may not be the best choice. If one quote is much lower than the others, this is a red flag. A qualified contractor understands the costs and complexities of renovations. A newcomer may not.
When assessing quotes, compare apples to apples. Check to see that the quotes include the same line items –– materials, labour, permits, tool rentals, etc. Ask for references and inquire about how long they’ve been doing renovations, insurance coverage, workers’ compensation coverage, and required licenses.
No home is 100 per cent perfect. Over time, there are always changes homeowners want to undertake to make it a more functional and inviting space based on current needs and to keep it in tip-top shape. No matter why you renovate, it is usually a wise investment.
Get renovation quotes from the contractors
With so much to think about when it comes to a home renovation project, ensure that you hire the right professionals for the job. Smart Reno can help you get up to three free renovation quotes from trusted contractors, and talk to an expert about renovation financing.
Calculate the cost of your home renovation project with our cost estimator
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.