Cost to Build a Home in T&T- 2021

Contrary to popular belief, the cost of building a home does not start at the groundbreaking of your foundation, it starts before the house is even designed. From purchasing the land to outfitting your home with appliances, furniture, and décor, there are many facets between these points that have costs associated with them. This article is meant to highlight all the possible costs associated with building a home, which we hope helps our readers be better prepared whenever you decide to make the journey to homeownership.

To make it easy, we will use a case study that describes a three-bedroom single-story home (1500 sq. ft) on one lot of flat land (5000 sq. ft) with an approximate construction cost of $ 975,000.00 (in Trinidad) and $ 1,125,000.00 (in Tobago). Look out for an upcoming blog, where we chat more about construction costs.

1. Land

The first step is acquiring your plot of land which usually is 5000 sq. ft. In recent times, depending on the location and topography, the cost can range between $75- $120 per square foot. To translate that into figures it will be:

5000 sq. ft. x $75   = $ 375,000.00

5000 sq. ft. x $120= $ 600,000.00

In addition to the principle cost of the land, you must also take into consideration all purchase-related costs, such as Real Estate Broker fees, Legal fees, Valuation reports, Insurances, and Handling fees. You should cater 15%-20% of the purchase price for these overhead costs.

                                    $375,000 x 20% = $75,000.00

                                    $375,000 + $75,000 = $ 450,000.00 ***

2. Professional Services

Architectural Designs

The Architectural Design Package is one of the most important aspects of building your home. These drawings are the manual or road map for your contractor to ensure you get the home you actually desire.

According to the Trinidad and Tobago Institute of Architects (TTIA), “Architects’ fees can be based on a percentage of the total construction cost or time expended, or can be a lump sum.”  Architects’ usual fees are normally 6%- 8% of your construction cost.

As Architectural Designers at KKCD, our fees range between 3-4% of estimated construction costs, depending on the complexity of the design.

Using our case study:

For Trinidad: $975,000.00 x 3% = $29,250.00

For Tobago:  $1,125,000.00 x 3% = $33,750.00

If you require further administrative services from your designer during the construction of the home, an additional fee must be considered.

(Optional Cost: Topographical Survey - Depending on the contours and undulations of your land the Architectural Designer may request a topographical survey, from a Land Surveyor, to design accurately.)

Structural Engineering Designs

Contingent on the topography of the land and the complexity of your designs, structural engineering drawings may be required for final drawing approvals. The structural engineering design fees vary and are based on the estimated cost of construction and the guidelines stipulated in the “Conditions Of Engagement For Consulting Engineers” - 2nd Edition, 2015 (Association of Professional Engineers of Trinidad and Tobago, APETT)

Using our case study:

For Trinidad:  $975,000.00 x 2%= $ 19,500.00

For Tobago:  $1,125,000.00 x 2% = $ 22,500.00

(Optional Cost: Geotechnical Survey- Structural Engineers may require this geotechnical investigation to be conducted in order to obtain information on the physical properties of soil earthworks and foundations for proposed structures.)

Quantity Surveyors Report

A cost report, which is provided by a registered quantity surveyor, verifies the construction costs of your project and thus allows the financial institution to accurately value the home you are about to build. Your financial institution will insist you use one of their approved surveyors to obtain your report. Usually, the fees for the services are $2500 for the first $500,000.00 (of construction costs) and .05% of the remaining construction costs.

Using our case study:

For Trinidad :  Cost of Construction= $ 975,000.00

                                First $500,000.00 = $2,500.00

                                    Remaining $ 475,000.00: .05% x $475,000.00 = 2,375.00

                                    Total Cost for QS Report = $4,875.00

For Tobago :     Cost of Construction= $ 1,125,000.00

                                    First $500,000.00 = $2,500.00

                                    Remaining $ 625,000.00: .05% x $625,000.00 = 3,125.00

                                    Total Cost for QS Report = $5,625.00

3. Financing Approvals

Heading for financing is the next step, once you’ve received your approved plans in hand.  Although the financial institutions do not charge for processing loan applications, there are items you are responsible for obtaining that have costs attached. Some of these include the Down payment (Usually 10% of Mortgage value), Projected Valuation Report, Mortgage Indemnity Insurance, Handling fees. For these items, you should cater between 15-17% of the mortgage value.

Using our case study:

For Trinidad: 

  Mortgage Value= $975,000.00 - 10% down payment = $877,500.00

                    Mortgage Fees = 17% x $877,500.00 = $149,175.00 **

For Tobago:   

 Mortgage Value= $1,125,000.00 - 10% down payment = $1,012,500.00

                   Mortgage Fees = 17% x $1,012,500.00 = $172,125.00 **

4. Construction

The contractor you choose to execute the construction, as well as the finishes you select would determine the final cost of construction. However, there is a cost range you can work within according to the size of your home.

But note, the cost of construction varies drastically between Trinidad and Tobago. For Trinidad, the cost ranges from $600 - $650 per sq. ft.  Alternatively, for Tobago, the cost ranges from $750-$800 per sq. ft.

 Using our case study:

            For Trinidad:     1500 sq. ft. x $650 = $975,000.00

                  For Tobago:       1500 sq. ft. x $750 = $ 1,125,000.00

This cost should include all materials, labour, and management costs associated with the construction of a turnkey home. Please note, however, these are estimated cost and it solely depends on the clients’ tastes and final selections.

As a standard rule of thumb, always dedicate 10% -15% as contingency cost. The reality is, there are always unforeseen items or surprises that arise during the construction process. Our advice is to keep a cool head and be prepared as much as possible financially,  to accommodate the unpredictable.

Now it’s time for the grand total:

                                                                    TRINIDAD                                   TOBAGO

a.      Land Cost                                  $   450,000.00                           $     450,000.00

b.     Architectural Designs                 $     29,250.00                          $       33,750.00

c.     Structural Designs                      $     19,500.00                           $       22,500.00

d.     Quantity Surveyor’s Report       $       4,875.00                           $         5,625.00

e.      Financial Approvals                   $   149,175.00                           $     172,125.00

f.      Construction Costs*                  $    877,500.00                           $  1,012,500.00

g.     Estimated Total                          $1,530,300.00                           $  1,696,500.00

*The Construction Costs is the value of the mortgage, minus your initial 10% down-payment. Also, this represents the principal of your loan from your financial institution.

** Cost does not include interest paid on the principle for the duration of the loan.

*** Cost can change depending on the refinancing policies of your financial institution.

We certainly hope that this article was helpful if you are planning to build your home in Trinidad or Tobago soon. As we always stress, preparation is key!

Leave any questions in the comment box below. We surely look forward to hearing from you!