Build, Buy or Renovate your home? What makes most financial sense?

A new build, a renovation or a well-established home in good condition. We explain the pros and cons of each.

Planning and research

If you’re planning an extensive renovation with plenty of structural changes, it may be cheaper to start from scratch or buy elsewhere. You also need to consider the age of the home, its location and the lifestyle offered as part of the decision making.

To kick-start your research, check out the Archicentre website for their Cost Guide, which can help you calculate the cost of a home improvement project, a renovation, a new home or a small property development. Archicentre is the building advisory service for the Australian Institute of Architects. Costs can vary and it’s a good idea to keep in mind that renovation costs could blow out due to unforeseen problems that could arise along the way.

One of the advantages of building a new home is you may ask your builder for a ‘fixed price contract’. Once you have a fixed price, you can then compare it to the cost of moving into a bigger home. This will include the difference between the price of the bigger home and your current home and the transfer costs such as stamp duty, legal fees, removalist costs, pest and building inspections and insurance.

Budget for renovations

A renovation is the right choice if you’re happy with your current property and locality and don’t want to move. As an added plus, a renovation won’t involve stamp duty charges and there are no real estate agent fees to contend with. And depending on the nature of the works (and unlike a rebuild), you may not have to move out of your home while the renovation is progressing. You simply work and live around it.

Something else to consider when renovating is that it can potentially be very expensive. Many people also find that renovations can take longer to complete than originally planned – and also cost more.

Cost blow-outs can occur where unexpected problems with the home’s condition arise that need to be fixed. Also, many owners tend to make adjustments and additions to the original contract of works with a builder. These adjustments can often hike up the costs as the renovation proceeds.

Securing a number of building quotes and then keeping a lid on costs once the renovation gets underway can produce the best financial outcome for homeowners.

Centrelink aged pension eligibilty

Your home is not counted as an asset when calculating pension or payment, but it does affect how your pension or payment is assessed under the assets test. If you are a homeowner your asset value limit is lower than someone who does not own their residence.

Making improvements or renovations to your home will help to increase the resale value and may also help to increase your entitlements as the asset is non assessable.

On the flip side, if you are downsizing and have surplus funds after the new purchase- this will go towards your Centrelink assessment and be deemed for both income and assets.

There is also recently introduced legislation that allows Retirees to place excess contributions from the sale of a property into their superannuation outside the traditional contribution caps where eligibility is met.

If you would like to discuss what options are available for you and what works best for your situation, please contact our office on (02) 9188 1547 or email



The material shown in this article is for general information purposes only. It is not intended to be, nor should it be read as specific personal investment or risk advice.
Before acting on any of the information contained in this article you should obtain special advice from a specialist investment or risk professional, which is appropriate to your specific investment or risk needs, objectives and financial situation.
Whilst all care is taken in the preparation of this material, no warranty is given with respect to the information provided, and accordingly no responsibility for errors or omissions, including responsibility to any person by reason of negligence is accepted by RP Wealth Management.

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Ronald Pratap

Principal Financial Planner at RP Wealth Management | Financial Planning l SMSF I Insurance l Property Advisory. Our purpose is to provide our clients with sound advice and direction to assist with their financial affairs and help them make the best choices in achieving what is important to them.


Level 2
351 Oran Park Drive
Oran Park N.S.W 2570

  • Ronald has always gone above and beyond for getting the best for my husband and I. He is always very punctual and helpful in giving advice. Ronald makes us feel comfortable and that no question is a silly one. I would 100% recommend him to anyone.

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    Regional Sales Manager | Special Education Teacher

  • I have been working with Ronald for over 6 years. During this time, Ronald has been outstanding in his efforts to improve the bottom line of my portfolio. His continued guidance and enthusiasm makes him the perfect adviser and manager of personal finances.

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    Deputy Harbour Master

  • I found Ronald to be very knowledgeable about all aspect of finance and being very helpful in overseeing my finances and making sure that I will live comfortably for quite a few years to come. his friendly nature comes from deep down and his clients are treated like family. I will not be afraid of recommending Ronald to all my relatives and friends.

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