Home renovation budget: realistic planning – 2026
Introduction
A good budget isn’t “the lowest price”—it’s the right amount for the result you want, with a contingency for surprises. This guide helps you set goals, split costs by work package, add a realistic buffer, and decide where to invest vs. where to save without killing quality.
1) Define the goal and finish level
Answer briefly (write it down):
- Purpose: own use / rent / sell.
- Finish level: Basic / Medium / Premium (materials, fittings, warranties).
- Deadline: target date and flexibility (tight = higher costs).
- Included areas: rooms/bathrooms/kitchen/services.
- What you keep: doors, sanitaryware, fixed joinery, appliances.
Rule: higher finish + tighter schedule = higher CAPEX and risk.
2) Split the budget by work package (typical % of total CAPEX)
Adjust for your project.
- Demolition, protection, waste: 5–10%
- Masonry, drywall, plasters/levelling: 8–15%
- Electrical (circuits, panel, lighting): 10–18%
- Plumbing/heating/HVAC: 12–22%
- Flooring (tiles/LVT/wood), skirting: 10–20%
- Wall/ceiling finishes (paints, wallpaper): 6–12%
- Joinery windows/doors, sills, hardware: 8–15%
- Fixed furniture/joinery & tops: 8–18%
- Design, inspections, project management: 4–10%
- Misc (acoustics, automation, accessories): 3–8%
- Contingency: 10–15% (see §4)
Tip: in older buildings or heavy reconfiguration, shift % from finishes to services and contingency.
3) Scope it properly (line-by-line)
- Demolition & substrate repairs (walls, screed, ceiling).
- New vs. partial networks (electrical/plumbing/heating/HVAC).
- Room-by-room finishes (material types, m²).
- Fixed furniture & equipment (kitchen/bath).
- Special conditions: occupied building, limited hours, difficult access, dust/noise protection.
Ambiguity now = extra cost later. Define clearly what’s in and what’s out.
4) Contingency (your safety buffer)
- 10–12% for healthy structure, no major service moves.
- 12–15% for older buildings, full bathroom/kitchen redo, layout changes.
- 15%+ for very tight timelines or hidden-risk buildings (moisture, leaks).
Use contingency for unknowns only, not mid-project upgrades.
5) Where to invest (high ROI)
- Services (electrical/plumbing/heating/HVAC): reliability, safety, efficiency; later repairs are costly and invasive.
- Bathrooms & kitchen: high use; good materials and install cut leaks and mold.
- Main flooring: durability, acoustics, maintenance.
- Lighting & outlets: comfort + flexibility; a simple lighting plan prevents patchwork later.
- Doors/hardware: durability, sealing → thermal/acoustic comfort.
6) Where to save without hurting quality
- Designer-brand finishes: pick tech-equivalent alternatives with same specs.
- Large-format premium tiles: use as feature walls, keep bulk mid-range.
- Joinery: premium fronts + standard carcasses.
- Automation: start with core (thermostats, lighting scenes); add extras later.
- Schedule: a flexible timeline lowers mobilization/fast-track costs.
7) Realistic timeline (and budget impact)
- Planning & procurement: 2–6 weeks (design approvals, lead times).
- Execution: 4–12 weeks (project size dependent).
- Handover & snagging: 1–2 weeks.
Faster = pricier. Overtime, urgent deliveries, parallel crews add +5–15%.
8) How to request comparable quotes
- Send the same bill of quantities to all bidders: areas, material types, finish level, timeline.
- Ask for three options: Basic / Medium / Premium (with Δ% on materials/warranties).
- Request clear inclusions/exclusions (demolition, waste removal, protection, design).
- Confirm warranty (works/materials) and rectification time.
9) Payment & cost control
- Milestones (e.g., 20% advance, 30% after services, 30% after finishes, 20% at handover).
- Weekly/monthly progress statements with photos & measurements.
- Change orders in writing: description + price before execution.
- Keep a project log: decisions, deliveries, issues, resolutions.
10) Common risks & mitigation
- Hidden issues (moisture, old wiring): that’s why you have contingency.
- Plan vs. site mismatches: site visits + weekly photos + signed change notes.
- Delivery delays: pick stocked items or order early; define equal & approved alternates.
- Ignored maintenance: reserve 2–3%/year for upkeep (sealants, filters, adjustments).
11) Mistakes to avoid
- Choosing the “lowest price” without checking what’s included.
- Starting works without a plan for power, lighting, sanitary layouts.
- Changing specs after installation (very expensive).
- Forgetting final cleaning and touch-ups (allocate 1–2%).
- Letting contingency get eaten by upgrades.
12) Mini calculation method (quick example)
- Set target budget = 100%.
- Split by packages (§2).
- Choose finish: Basic / Medium / Premium → apply Δ% to key packages (services, finishes, joinery).
- Add 10–15% contingency.
- Adjust for schedule: tight? add +5–10%.
- Review: trim decorative luxuries, not critical services.
FAQ
How big should my contingency be?
Generally 10–15%, more for older buildings or heavy reconfiguration.
Can I save on services?
Only if compliance and core components remain intact. Cutting corners here creates the highest risk.
Is design worth paying for?
Yes. Even a minimal plan (power/lighting, plumbing runs, dimensions) lowers errors and pays back in time and money.
How do I avoid creeping over budget?
Keep change orders written and pre-approved, track progress weekly, and protect contingency for genuine unknowns.
Conclusion
A solid renovation budget starts with clear goals, well-defined work packages, a realistic contingency, and disciplined decisions. Invest in services, wet areas, main flooring, and lighting; save on brand premium and non-critical extras; keep the timeline reasonable and manage the site with firm control of change orders. That’s how you land a predictable, surprise-free result.
