How much does it cost to build a house?

*Update: Please contact our team for current pricing.

Who hasn’t thought about building their own home at some point? Today, we can build ecological, healthy, net-zero homes tailored to our family’s needs; we just need to choose the right location. But like any dream, it’s essential to be aware of the economic viability to make it happen. Therefore, today we answer the key question: how much does it cost to build a house?

At Slow Studio, we always advocate for putting all the figures on the table even before purchasing land. The total cost of building a house not only includes the land purchase, the project, and the construction itself, but also a series of additional expenses, taxes, and fees that are often not included in the mortgage.

In today’s article, we analyze the self-build costs for a 100-120 m² house, information based on our firm’s experience in passive house construction.

Thus, we will try to answer the question how much does it cost to build a house? in the most detailed way possible.

In the process of building a house, we distinguish three different phases: land purchase, house construction, and the project and facultative direction. This is the framework we will follow to analyze all costs in detail. But before we get to that, we want to note six preliminary considerations that can affect our budget forecasts.

Let’s look at each of them in detail:

1- The type of house we want.

Today, construction and house design methods have advanced significantly: using 3D models during the project phase, we can determine the energy demand and, therefore, the heating or cooling needs of a home — which does not necessarily mean it requires air conditioning as a cooling system.

Thanks to this, we can define every construction system, material, and finish of our home in detail. From deciding the thickness and width of windows to specifying insulation down to the necessary centimeter tolerance.

Every decision is based on rigorously verified technical criteria with engineers and efficiency models. This is why stating how much it costs to build a house becomes easier every day thanks to constant technical advancements.

However, adding sustainability criteria to our future home certainly comes at a cost, meaning paying a little more per square meter compared to a “conventional” house, where often the builder himself decides the opening sizes or insulation thicknesses “by eye” if the architect has not been strict.

This advanced design approach is what is used to achieve passive houses which, as we always say at Slow Studio, are not much more technified houses or ones with complicated systems, but rather houses that are very well thought out and executed.

We must consider that in 2020, a European directive came into force requiring all new public buildings to be net-zero energy, and it is expected that this will extend to all new private homes in a few years.

Thus, the first consideration when assessing the cost of our home is to decide whether we want a passive house or a house that does not take strict efficiency criteria into account, as the initial cost can vary.

2- Location where we are building

The location of our home will affect the price, as land costs, architectural services, municipal taxes, and builder rates vary depending on the construction site.

A specific example is the Balearic Islands, where there is little competition among architects and builders, significant foreign investment, and raw materials always arrive by sea. This condition means that any project in the Balearic Islands is calculated with higher rates than on the mainland.

Conversely, Spanish communities with slower economic growth that have recovered more slowly from the crisis, such as Galicia or Andalusia, have lower architecture and construction costs. This condition, at least concerning architect fees, seems to be regulating, as the CSCAE (Superior Council of Colleges of Architects of Spain) is compiling a list of indicative architectural fees by locality with the aim of establishing mandatory minimums to ensure quality and regulation in the sector.

3- More square meters, more savings

As is often the case in all sectors, the larger the quantity, the more economical the result. A 100 m² house with 3 bedrooms and two bathrooms is not the same as a 200 m² house with the same program. The 200 m² house will have a lower cost per m².

This is not always a strict rule, as the construction cost will also depend on the shape of our future home. For example, if we have a less compact house with a large facade, which is one of the most expensive construction elements to execute, the project will become more costly.

4- Type of finishes

Each client must choose their own balance, and the project team’s job is to guide each family to make the most of this available investment, which is often determined by a bank mortgage.

In general, when we talk about budgets, what we are really discussing is a matter of the client’s scale of priorities.

For example, some families want to prioritize their future home being a net-zero and self-sufficient house in water and energy management, preferring to sacrifice finishes and leave walls or installations exposed to achieve this. Other families prefer to prioritize natural and healthy materials and for this, they sacrifice square meters. The combinations are many, and everyone must find their own balance, much more subject to personal demands than strictly economic ones.

Understanding the economic variables empowers us to make design decisions and prioritize what matters to us. The question is no longer so much how much it costs to build a house, but how much it costs to guarantee one aspect or another that may interest us, be it efficiency, health, or m².

5- Type of land and subsoil

Anyone who has started the process of searching for land will know that sloped plots are more economical than flat ones. This is not only due to the complexity of having direct contact with the exterior on a sloped plot, but also because construction costs increase when earthworks, excavation, and containment are required on a plot before construction can begin.

On the other hand, a key piece of information for knowing how much it costs to build a house is what lies beneath the subsoil, and this is usually not known until the land has been purchased and a geotechnical study has been commissioned.

In case of doubts about the resistance of our subsoil, it is always possible to order a geological survey before buying the land.

6- The construction system

The most economical construction systems correspond to the most conventional and widespread ones, such as concrete block and hollow brick (gero) with an exterior ETICS (External Thermal Insulation Composite System).

However, timber structures have become increasingly popular, as they offer very competitive prefabrication and sustainability standards.

How much does it cost to build a house?

1- Land purchase

The cost of the land should represent approximately 30% of the total budget for the future home’s construction. In some exceptional cases, this percentage may increase, such as when acquiring land near the sea or in highly sought-after urbanizations. In any case, as a general rule, the land should never exceed 50% of the total investment to maintain the overall coherence of the project.

To the base purchase price, we must add one tax or another depending on whether it is a transfer of assets from a private individual to another private individual, or from a company to a private individual.

The Property Transfer Tax (ITP) between private individuals is paid upon formalizing the purchase and is 10%.

If the land is owned by a company, such as a bank, we will not pay ITP, but rather VAT (21%), as we are purchasing an asset from them.

In both cases, we will have notary and agency costs, which are around 1-2% of the transaction.

2- House construction

(1) Construction Execution Budget

CEB = €2,000/m² x 100-120 m² = €220,000-€240,000

To the base cost of €2,000/m² — which is what an average builder charges today — we must add the cost of foundations, which depends on the type of land and usually ranges from €200-€300/m².

Thus, in practice, the actual built m² is calculated between €2,000 and €2,100 depending on the complexity of the land (slope and subsoil resistance), as well as the number of m².

At Slow Studio, the approximate price we set for the construction of a 100-120 m² home is €2,000/m².

The CEB (Construction Execution Budget) cost consists of the direct multiplication of the base construction rate of €2,000/m² built by the necessary square meters.

For a 100-120 m² house, we obtain a base construction cost (CEB) of €240,000, which is what we pay the builder, excluding VAT.

(2) Taxes and Licenses

Attention! Some taxes detailed below will be calculated on the Material Execution Budget (MEB) instead of the CEB.
For the example of this 100-120 m² house, the MEB will be set at 81% of the CEB.

VAT = 10% of €240,000 = €24,000

To the base cost of construction, we must add 10% VAT, unlike the rest of the taxes and licenses.

ICIO = 4% of MEB = €9,600

This tax always surprises our clients, as in addition to the Building Permit, the City Council charges the Tax on Constructions, Installations, and Works (ICIO), which is around 4% of the MEB.

Building Permit = 4% of MEB = €9,600

Now, this is the classic municipal tax applied to all works, and depending on each city council, it represents a cost of between 4% and 5% of the MEB.

First Occupancy License = 0.05% of €240,000 = €120

This is a tax to obtain the occupancy certificate for a new home.

(3) End-of-work procedures

Endorsement = approximately €800

The endorsement is the verification by the professional association of each community of the identity and personal qualification of the project author, whose price usually ranges around €800.

Construction insurance = approximately €2,500

Every property is required to have decennial insurance, which is not a percentage based on the project budget, but a scale calculated based on various conditions that can vary greatly from one project to another.

New build deed AJD = approximately 1.5% of CEB = €3,600

The so-called New Build Deed on Documented Legal Acts is a type of fee that covers the costs of issuing the property’s paperwork.

Property Registry inscription = approximately 0.43% of CEB = €1,032

The inscription in the Property Registry records all legal processes involved in a property and has a price related to the property’s value.

Agency fees = approximately 0.16% of CEB = €384

Agency fees are always susceptible to optimization, but the reality is that they save us a lot of work.

(4) Utility connections

This refers to the connection and activation of electricity, water, and gas (if applicable) supply lines, as well as connection to the municipal sewage system.

Utility connections = approximately €3,000.00

(5) Tree felling

If trees need to be felled or the land cleared, we must include this cost in the forecast, which can range from €500 for a basic clearing to €3,000 for felling several trees. As an example, we will note €1,500.

Tree felling or land clearing = approximately €1,500.00

3- Technical projects

(1) Architectural project and construction management

Architectural project and construction management = 10% of CEB

The price of an architectural project can vary greatly depending on the selected professional, from architects employed by a construction company to highly specialized teams in passive houses collaborating with efficiency experts, like our Slow Studio, who typically work with fixed fee scales based on the built square meters of the home.

Technical architect = approximately 1/3 of the architect’s cost

The technical architect provides support in construction management as the Executive Director,

who is also usually responsible for quality control and health and safety on site.

(2) Energy certification

Energy certification = approximately €1,350.00

This item is exclusive to our Slow Studio firm and accounts for a large part of the success of our passive houses’ performance. This is the cost for the review and advice on our projects by one of the best energy efficiency engineering firms nationwide.

Our engineers transfer your house design to a 3D computer model, rigorously noting the thickness of each wall, each insulation layer, and various project metrics.

This data is combined with the orientation and climatic data of your plot, allowing us to obtain very precise energy demand data that enables us to optimize the design and efficiency installations of your home.

(3) Geotechnical and topographical study

Geotechnical study = approximately €700

Topographical study = approximately €300

We will also need the collaboration of a geologist and a topographer to understand the subsoil, slope, and boundaries of your land in detail, and thus be able to make decisions about the project’s implementation on the site.

(4) VAT Tax

VAT = 21%

Technical projects, unlike construction, are considered professional services and are therefore subject to 21% VAT, calculated on the total cost of the projects.