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Cost Per Square Foot Explained: What It Includes—and What It Doesn’t

Updated: Jun 10

If you're planning to build a custom home, chances are you've asked, "What's the cost per square foot?"

It's a common question, but if you're not careful, it can lead you down the wrong path. Cost per square foot seems simple, but it rarely tells the full story.


Here's how to ask better questions, avoid surprises, and focus on what matters: the total cost of your home.


Award-winning custom home design  | Finalist at the Georgie Awards 2023.
Award-winning custom home design | Finalist at the Georgie Awards 2023. See more!

1. There's No Standard Way to Calculate It

Every builder or designer may calculate the cost per square foot differently. Some include only the developed square footage, some include only the above grade square footage, and some average the cost per square foot across all finished spaces. Others include garages, basements, or even outdoor spaces.

There's no rulebook. That's why comparing square foot costs without context can be misleading.


2. Always Ask: What's Included?

Never take a cost-per-square-foot number at face value. Ask what's included. Is it just the construction? Or does it include:

  • Design fees

  • Permits

  • Engineering

  • Surveys

  • Asbestos abatement 

  • Demolition (if needed)

  • Site preparation 

  • Service connections such as sewer, water, electrical, etc.

  • Landscaping 

  • GST

Costs can vary wildly depending on what's wrapped into the number. Ask for a detailed breakdown.



Before you pick up a hammer or hire a builder, get your hands on PHASE ONE CUSTOM HOME PLANNING GUIDE. This free, expert-curated resource walks you through the must-know steps, insider tips, and common pitfalls to avoid—so you can plan confidently, budget smarter, and bring your vision to life without surprises.


3. Understand the Assumptions

Ask these follow-up questions:

  • Is basement square footage included?  Is it at a different cost per square foot?

  • Are porches, decks, or garages factored in?

  • Is the level of finish assumed to be basic or high-end?  Show photos of your expectations, or better yet, walk through a finished home to understand the finish quality in relation to the cost per square foot.

  • What kind of building envelope and insulation is factored in?  Keep in mind many municipalities have Code requirements which dictate certain building methodologies (for example, the Step Code in BC)

Even "hidden" design and structural assumptions can shift costs dramatically. Complex rooflines, oversized windows, or high ceilings will all affect the final number.


On the flip side, some of these design features may be worth the initial investment.  For example, our design team firmly believes in investing in a high quality building envelope including windows.  In the long run, it enhances the value, enjoyment, and longevity of your new custom home.


An experienced custom home designer can help allocate your budget accordingly to maximize your long term investment.


Watch the full video


4. Focus on Total Cost, Not Square Foot Cost

In the end, what matters most is your total project cost—not just a cost-per-square-foot estimate.

That includes:

  • Design

  • Permits

  • Construction

  • Landscaping (if needed)

  • Move-in readiness

If you're budgeting for a custom home, you need to be clear on that number from day one.


Don't forget to budget for costs not related to construction. For example, furniture, carrying costs, living costs during the build, moving costs, etc.  These costs can add up quickly.


Instead of asking “What is the cost per square foot?”, a more accurate question is “What is the estimated total cost range of my new custom home?”. And then ask the follow up questions we referenced earlier.



Need Help Planning Your Budget?

At Phase One Design, we help homeowners make sense of their custom home costs. We don't believe in generic estimates—we believe in planning with purpose.


 
 
 

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CALGARY          201, 1218 9 Ave SE Calgary, Alberta, T2G 0T1  |  403.457.3645

VANCOUVER     788, 601 West Broadway , Vancouver, BC, V5Z 4C2  |  604.670.7668

OKANAGAN       By Appointment

EMAIL                hello@phaseonedesign.ca

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