How Much Money Do You Really Have for Your Project?

Defining a budget is often the first step in a project.

Most projects begin with a clear number in mind:“Our budget is $500,000.”

It’s a good starting point — but it’s not yet a construction budget.

Between the amount you have in mind and the money actually available to build, there are several essential costs that are best understood from the outset: professional fees, permits, taxes, site management, and contingencies.

Let’s take a closer look at what needs to be deducted — and, more importantly, what truly remains for your project.

Construction Costs: The Real Starting Point

When discussing a project budget, it is important to distinguish between the overall budget and the construction cost.

Construction cost refers only to:

• labour

• materials

Most other budget items are calculated based on this amount. In other words, it is not the total budget that goes directly into building, but rather what remains after several essential deductions.

Professional Fees: Approximately 10%

Architectural fees generally represent 8 to 10% of construction costs, depending on the project’s complexity and the scope of services.

They typically include:

• project design

• preparation of drawings and specifications

• regulatory and permitting processes

• coordination and, in some cases, construction oversight

These fees are not an “extra.” They are what allow the project to exist — and to proceed smoothly.

Fees for other professionals must also be considered: designers, engineers, surveyors, and others.

Building Permit: Approximately 1%

In Montréal, the cost of a building permit is approximately 1% of construction costs. Elsewhere in Québec, this percentage is often slightly lower, but it varies depending on the municipality and the type of project.

It may seem minor, but it should be accounted for early in the process.

Taxes: Approximately 15%

In Québec, taxes (GST + QST) represent approximately 15% on most construction work. They apply not only to construction costs, but also to professional fees.

This is often the most underestimated item in an initial budget — and yet, it is unavoidable.

Contingencies: 10 to 15%

Even with careful planning, every project involves a degree of uncertainty.

A contingency of 10 to 15% of construction costs is recommended. This allows you to:

• absorb hidden or unforeseen conditions

• respond to technical adjustments

• make informed decisions as the project evolves

This reserve is not a margin for error, it is a management tool.

Planning for contingencies isn’t pessimism — it’s good judgment.

Contractor Overhead and Profit: Approximately 15%

Beyond direct construction costs, the contractor must cover:

• site management

• coordination of subcontractors

• administration

• insurance

• 
  

This category, which includes profit, generally represents about 15% of construction costs.

So… How Much Is Really Left to Build?

Let’s look at a simple example.

Total client budget: $500,000

If we add up typical percentages:

• Architectural fees: ~10%

• Permit: ~1%

• Taxes: ~15%

• Contingencies: 10–15%

• Contractor overhead & profit: ~15%

Approximately 50 to 55% of the total budget does not go directly into labour and materials.

The result:From a $500,000 budget, there is often between $225,000 and $250,000 left for actual construction work.

Understanding the true structure of a budget makes it possible to:

• avoid unpleasant surprises

• adjust the project early on

• prioritize intelligently

• design a realistic, coherent, and durable project

A good project isn’t the one that costs the most, it’s the one that uses the right budget, in the right place.

In Conclusion

Before discussing square footage, materials, or aesthetics, it is essential to understand how a budget is structured. This understanding serves one purpose only: to design a project that is realistic, well thought out, and aligned with your means.

What’s Next?

Every project is unique, and the same budget can lead to very different outcomes depending on context, site conditions, and objectives. If you would like to validate what your budget can realistically achieve, an initial conversation can help clarify the possibilities.

Schedule an exploratory meeting

Or read some of other articles to help you clarify what you can really do with your budget