Cost Per Square Foot Explained: What It Includes—and What It Doesn’t
- Jay Olea
- May 21
- 3 min read
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.
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.
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.
Email: hello@phaseonedesign.ca
Download: Custom Home Planning Guide
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