Renovate or Move?
Many people wonder which is more cost effective: building an addition or moving into a new home. Let’s look at a simplified case of an existing house and a new house located in the same Toronto west end neighbourhood.
The existing house required a rear or side extension to gain extra bedroom or family space : Current value: $ 400,000 + Reno cost $100,000 + HST
New house with required extra space (some renovation required): Estimated: $475,000 - $500,000
Scenario 1: To Renovate an Existing House (owner can live in property while it is renovated)
Current value: $400,000
Renovation costs (Addition): $100,000 + HST
Estimated renovation cost: $113,000
Scenario 2: To Move to a New House (some renovation required)
Estimated value: $475,000 - $500,000
Difference to existing house : $75,000 – $100,000
Land transfer tax: $11,200 - $12,200
Difference to existing house buying costs $86,200 – $112,200
Commission: $24,000 + HST
Moving expenses: Estimated: $2,000 + HST
Legal expenses: Estimated: $1,500 +
HST Home inspections: Average: $500 + HST
Minimum renovation: (window coverings, painting, bathroom upgrades, new carpets etc): $10,000 + HST
Total Estimated moving costs: $42,940
Total upgrade and moving costs to get the extra space: $131,140 - $154,940
Of course this is a simplified calculation and in reality the cost will vary according to the specific circumstances, but the case can be made that renovating is more cost effective than moving in the above situation.