Practical Guide to Planning Your Renovation Spend

I have watched plenty of homeowners start a renovation full of excitement, then finish stressed, over budget, and wondering where it went wrong. In reality, your outcome depends on how clearly you lock in your scope, manage price risk, and control cash from day one.

I use a simple framework to price what you know, cap what you do not, and stage your cash so you never run dry. Along the way you will see key Victorian rules that protect your deposit and payments, plus realistic cost ranges to compare against real quotes.

Set Your Objectives and Constraints First

Deciding what success looks like before you get quotes stops you paying for pretty extras that add cost but little value.

‍

Define What Success Means

Write down two or three measurable outcomes. For lifestyle goals, that might mean increasing kitchen bench space by about 30 percent or adding a second bathroom. For investment goals, aim for a modest 3 to 5 percent value increase by modernising key areas that appeal to buyers.

Lock Your Hard Constraints

State your maximum spend as a single ceiling number that includes GST (goods and services tax), design fees, permits, contingency, and finance costs. Set your earliest start date and latest completion date. If you cannot move out during the work, plan how you will live through noise, dust, and room closures.

Map Your Scope in Writing

Budgets blow out when inclusions are vague, so a written scope stops creep and makes quotes comparable across builders.

Create a Scope Register

Break down each room with works, finishes, fixtures, joinery, and services in a simple list or spreadsheet. For example, your kitchen scope might read: remove old cabinetry, new laminate cabinetry, engineered stone benchtop, three pendant lights, plumbing reconnect, new circuits for oven and cooktop. Record quantities and dimensions for everything so a builder can price it without guessing.

Document Your Exclusions

Common exclusions include landscaping, blinds, loose furniture, and whitegoods unless you spell them out. Add service assumptions like no asbestos present and no major structural defects. If those change, they become a variation you need to approve in writing.

Victorian Rules That Protect Your Money

Knowing the Victorian rules keeps your deposit safe and stops surprise price changes from blowing up your numbers.

Contract Requirements

A written major domestic building contract is required for most residential work over ten thousand dollars. Cost plus contracts, where you pay actual costs plus a margin, are generally only permitted above one million dollars, so most projects should use a fixed price contract with clear selections.

Deposit Caps and Insurance

Deposits are capped at 5 percent for contracts of twenty thousand dollars or more, and 10 percent below that threshold. Never pay any money until your builder provides the Domestic Building Insurance certificate for eligible works over sixteen thousand dollars. This insurance is compulsory warranty cover in Victoria.

Room by Room Cost Benchmarks

Use these Australian ranges to sense check whether quotes you receive are realistic and complete.

‍

Kitchen Costs

Modest kitchens usually cost between fifteen thousand and twenty five thousand dollars with laminate cabinetry and minimal service moves. Mid range kitchens typically sit between twenty five thousand and thirty five thousand dollars with engineered stone and moderate upgrades. For a Melbourne specific breakdown of inclusions and realistic ranges, see this detailed guide to kitchen renovation cost, then cross check your allowances against it before you sign a contract.

Bathroom Costs

Family bathrooms range from fifteen thousand to thirty thousand dollars depending on waterproofing complexity, tile selection, and whether plumbing is relocated. Key cost drivers include wet area waterproofing, custom shower screens, underfloor heating, and any change to the room layout.

Interior and Exterior Work

Flooring runs fifty to one hundred and twenty dollars per square metre for hybrid or engineered timber supplied and installed. Internal repainting costs fifteen to thirty dollars per square metre depending on preparation. New openings for windows or doors typically cost three thousand to eight thousand dollars, with structural steel and brickwork pushing costs higher.

Build Your Budget Skeleton

A line item budget lets you track actuals, which are the real costs as invoices arrive, and isolate overruns the moment they happen.

Structure Your Line Items

Break costs into trades and materials by package, such as demolition, framing, electrical, plumbing, waterproofing, tiling, painting, and joinery. Add preliminaries, meaning set up costs like permits, design, engineering, and waste management. Include owner costs such as temporary accommodation, storage, and finance interest.

Size Your Contingency

Allow 10 to 15 percent for a light refresh with minimal service moves. For structural changes or older homes with unknowns, budget 15 to 20 percent. Treat this reserve as untouchable and release it only through a simple change approval process you track in writing.

Hidden Costs You Must Include

Small line items can quietly sink budgets if you forget to list them upfront. Skip bins and waste removal typically cost five hundred to twelve hundred dollars per bin. Asbestos testing runs three hundred to seven hundred dollars if needed. Switchboard upgrades and RCDs, which are safety switches, cost twelve hundred to thirty five hundred dollars when required to meet current standards. Budget three hundred to seven hundred dollars per week for temporary accommodation if you need to move out.

Cost Control During Construction

Tracking actuals weekly gives you time to correct small problems before they snowball into expensive disasters.

Weekly Reviews

Hold a short fifteen minute meeting with your builder each week. Review completed work, next week's tasks, and the budget status. Update your cost to complete forecast so you always know how much contingency remains.

Variation Management

Approve no work without a signed variation that states scope, price, and time impact. Keep a running change log with dates, reasons, amounts, and cumulative totals.

Quick Checklist to Start

These steps turn the framework into concrete action you can complete in under an hour.

• Signed contract and Consumer Building Guide acknowledged
• Domestic Building Insurance certificate on file
• Building permit issued with stamped plans on site
• Lender pre approval in place and progress payment process confirmed
• Selections schedule completed with brands and models

Wrapping Up

You now have a practical framework to set objectives, lock scope, protect payments, and track costs with confidence. Stay disciplined on selections, keep allowances tight, and approve changes in writing only. Close out with a clear defects list, copies of warranties, and compliance certificates so your investment stays protected for years to come.

FAQs

These answers cover the most common questions about scope, numbers, and timing.

How much contingency should I set aside?

Allow 10 to 15 percent for cosmetic jobs with minor changes, and 15 to 20 percent for structural work or older homes with unknowns.

Should I use a fixed price or cost plus contract?

In Victoria, most projects should use a fixed price contract with detailed selections listed. Cost plus is restricted and shifts price risk back to you.

When do I need insurance and permits?

Your builder must obtain Domestic Building Insurance for works over sixteen thousand dollars before you pay a deposit. Do not let work start until your building permit is issued and a copy is on site.

How do progress payments work with the bank?

Lenders release funds by stage, such as base, frame, lock up, and completion. They usually charge interest only on the amounts drawn, not on the full loan.

‍