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Kitchen Toolbox : Finances


Budget, the word everyone hates! But, of course, a very necessary part of the whole process. After you have gathered all your ideas and wish list, it is time to realistically assess how much you can afford to pay. You may have to slightly reign in some ideas that you were thinking of so that you can get the job done!  It may seem an obvious and simple idea - but keeping within budget is not always easy!

Remember that once your home is done - especially if a major home overhaul is completed, that ancillaries such as landscaping, fences and retaining walls may start to look a little shabby when compared to your newly refurbished home - so you may want to keep some money aside to spruce these up too.

You may also want to book in and consult with a finance expert to help you if you require finance to complete your renovation. When banks loan to clients carrying out renovations the requirements can be a little different to simply lending to purchase a property - you don’t want to get halfway through your renovation, want to borrow more money and be rejected. It is prudent to check on all these aspects first.

House Value Kitchen Value Percentage of Home
$200,000 - 450,000 $15,000 - $30,000 7% - 10%
$450,000 - $750,000 $20,000 - $48,000 5% - 8%
$750,000 + $30,000 + 4% - 6%

If you are renovating your whole house then a rule of thumb is to utilize approximately 10% of the total amount on your kitchen
Budget guide includes all trades, appliances and lighting


Here's a handy breakdown of the average costs involved in remodeling a kitchen:

Cabinetry & benchtops - 35%

Labour - 20%

Appliances - 20%

Windows - 10%

Fixtures  - 5%

Fittings - 3%

Other - 7%

Do bear in mind that this doesnt cover the cost of any design or consent work your project may need, or any amends to existing plumbing caused by moving the layout or location of your kitchen.

Budget process

Right from the beginning decide how much you want to spend, and stick to it.  Setting a budget for your kitchen remodel and staying within it sounds so obvious and simple, but it's harder than you think.


Expect the unexpected

Be prudent when calculating how much you have to spend as you never what could happen between the start and end of the project - be it related, or an unexpected cost in some other area of life. You're going to encounter surprises in your kitchen remodel, especially in an older residence. There are all sorts of budget-busting surprises lurking behind the walls or under the floor. Like when you rip out your walls and discover your electrical wiring is out of date. Or you pull out your dishwasher and discover the floor beneath it is rotten thanks to a water leak you didn't know about. Leave some wiggle room in your budget to cover these surprises.


Make a list of priorities

What's most important to you? New appliances? New cabinets? Write down your priorities so if unexpected costs hit your budget, you'll still get the top things on your list done. When doing so think about all the little extras in your design as these things add up. It may be worth speaking with your designer or builder to find out if there are more cost effective


Know your bank-man

Don't forget to be aware of when any loans will come through from the bank, as well as how much they'll be and what your repayments will look like. You want to ensure you've got the funds to pay for materials and labour at the right point in the process to ensure that there are no delays to your project.

During the project, may progress payments to your tradespeople rather than paying for work in advance. This ensures that you only pay for work completed, so you never owe more than the house is worth at each stage.

Know your lifestyle costs

Will you stay in your home while the project is completed or will you need to find a rental property for a short while? Even if you are staying in your own home you'll need to consider the cost of dining out or takeways while your kitchen is out of order! Alternately, plan your project over the summer months and make the most of your BBQ. Don't forget that it wont just be the oven that is displaced during this period - you'll also need to rehome the fridge and freezer if you plan to stay on-site during renovations. You may also need to consider the cost of alternate entertainment if your project falls over school holidays as you don't want the kids underfoot while work is being done.


Make a plan

Make yourself a spreadsheet of all the costs involved and track them as you go to ensure you don't deviate. Don't be tempted to spend on extras mid-project as these costs will add up and could end up in rework (and recharges) from your contractors.


When it all gets tough just remember how great it will be when it is all finished and you can enjoy your new kitchen!

Beware of overcapitalising

If you don’t intend selling, the money you spend on renovating will be an investment in the comfort and enjoyment of the house. Whether you increase the value of the home may not be an important factor in how much you decide to spend.

However, it is easy to get carried away with the excitement of doing up a home and overcapitalise by spending money that can never be recouped if you do end up having to sell. You may regret the $60,000 kitchen you put into your $200,000 house should unexpected life changes occur, such as a marriage breakdown, or a business failure. It may be money you never get back if you have to sell and apportion the proceeds.

Make sure you take a look at the value of your land as well when deciding on an amount to spend on your property. It may help to get a valuer around to value your property and get their advice on what the maximum they believe you should spend on a renovation. Also keep in mind the character of your neighbourhood - a top-of-the-line kitchen may not earn the return you hope for in a less-than affulent area. With all this in mind you will then have something to gauge your initial investment figure by.

If your house needs a great deal of work to get it how you would like, decide whether you want to go to all the trouble and expense, or whether it would be better to sell and buy something more suited to your needs.

Key questions to answer

  • Does the final design fits within your budget?  Be realistic about how much you can afford to spend.
  • How will you finance the project?
  • If you are borrowing, have you checked your allowances and requirements with your bank or finance company?
  • Do you need to set aside separate budgets for associated costs, such as possible alternative accommodation and insurance?
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