A renovation contingency budget should be 10% of the construction price in a home built after 2000, 10 to 15% for kitchens, bathrooms and basements in homes from the 1970s to 1990s, and 20% or more when you open walls in a pre-1970 Ontario house. The contingency pays for conditions nobody could see before demolition, like rot, old wiring, lead pipes or asbestos. It does not pay for upgrades you choose halfway through the job. Those are change orders.
- Size the contingency to the house's age and how much you're opening up, not to the size of the project.
- Keep it out of the contract price and out of your finishes budget. If you plan to spend it, it isn't a contingency.
- Choices you make mid-project (a better tile, an extra pot light) are change orders, not contingency items.
- A few days of investigation before you sign, like an electrical assessment, a drain camera and an asbestos test, can turn unknowns into fixed prices.
- HST applies to contingency work too, so add 13% to whatever you hold back.
What a renovation contingency actually covers
A contingency is money you set aside for concealed conditions. These are problems that sit behind drywall, under the subfloor or below the slab, and nobody can price them honestly until the space is open. A good contractor can tell you what's likely in a 1955 bungalow. Nobody can tell you exactly what's there until demolition day.
Typical contingency items:
- Rotted subfloor or joists under a toilet, tub or dishwasher
- Wiring that has to be replaced before new work can connect to it
- Galvanized supply lines, cast iron stacks or a lead water service that fails once it's disturbed
- Asbestos in plaster, drywall compound, pipe wrap or vermiculite attic insulation
- Undersized or notched framing that has to be sistered or replaced
- Inspector-required fixes that only showed up during rough-in, like a missing vent or an unsupported beam
A contingency isn't a slush fund for nicer finishes, and it isn't a cushion that lets a contractor underquote. The scope and fixed price come first. The contingency sits beside them.
Contingency percentages by project type and house age
These are the ranges we use when helping clients build a budget. They're percentages of the construction price before HST. Go to the high end of a range if the work involves layout changes, moving plumbing, structural work, or a house with a long history of DIY repairs.
| Project | Built 2000 or later | Built 1970 to 1999 | Built before 1970 |
|---|---|---|---|
| Cosmetic refresh (paint, flooring, fixtures) | 5% | 5 to 10% | 10% |
| Kitchen renovation | 10% | 10 to 15% | 15 to 20% |
| Bathroom renovation | 10% | 15% | 15 to 20% |
| Basement finishing | 10% | 10 to 15% | 15 to 20% |
| Legal basement apartment | 15% | 15 to 20% | 20%+ |
| Home addition | 10% | 15% | 15 to 20% |
| Whole-home renovation | 15% | 15 to 20% | 20 to 25% |
Bathrooms carry more risk than their size suggests. Water gets behind tile for years before anyone sees it. Basement apartments rank high because opening the space for fire separation, egress and new circuits often exposes the old electrical service and drains. That's why our legal basement apartment projects start with a careful look at the panel and the plumbing.
Why older Ontario homes need a bigger cushion
Much of the housing stock in Oakville, Burlington, Hamilton, Etobicoke and Toronto was built before modern codes. Each decade left something different in the walls.
Wiring
The Electrical Safety Authority notes that knob and tube wiring is still a common sight in many older homes. ESA also warns that these homes may not have the electrical capacity to meet today's needs, which leads to oversized fuses, extension cords used as permanent wiring, and improper connections. A modern kitchen with an induction range, dishwasher and microwave drawer can't run on a 60-amp service. Once the walls are open, a panel upgrade and new circuits are often the only sensible route. Houses from the 1960s and 70s can also have aluminum branch wiring, which an electrician has to assess before anything connects to it.
Plumbing
The City of Toronto says lead can be found in water service pipes in homes built before the mid-1950s and in solder used before 1990. The homeowner owns the stretch of pipe from the property line into the house, and Toronto will replace its side on a priority basis for residents who commit to replacing theirs. Inside the house, mid-century homes often still have galvanized steel supply lines and cast iron drains. They hold up until someone cuts into them.
Asbestos and vermiculite
Ontario lists residential insulation, drywall compound and pipe insulation among the places asbestos-containing material is most commonly found. O. Reg. 278/05 sorts asbestos work into Type 1, 2 and 3 operations, and each type has its own controls. Health Canada has advised that it is prudent to assume vermiculite insulation produced before 1990 may contain some asbestos. If your renovation disturbs any of this material, abatement comes first, and it's paid for out of the contingency.
Structure
We regularly find joists notched for old drain lines, beams resting on stacked blocks, and walls that turn out to be load-bearing because a previous owner moved a post. Rough-sawn lumber in pre-war houses is also a different size from modern framing, so tying new work into old takes extra labour and shimming.
Contingency vs change order vs allowance
Most budget arguments start because these three things get mixed up. Here's how we separate them:
| Contingency item | Change order | Allowance | |
|---|---|---|---|
| What triggers it | A hidden condition found during the work | You change the agreed scope or selections | A placeholder for an item not chosen yet |
| Example | Rotted subfloor under the old tub | Adding a niche and a second shower head | $4,000 set aside for tile, final pick pending |
| Who controls it | The house decides; you approve the fix | You decide | You decide within the budget line |
| Paid from | Contingency fund | Your own pocket, on top of everything else | The contract, adjusted up or down at selection |
| Avoidable? | Rarely, but investigation reduces it | Yes, with complete design before signing | Yes, by making selections early |
These are not contingency items, even though people often treat them that way:
- Upgrading from a laminate to a quartz countertop after the template is cut
- Adding pot lights, outlets or a heated floor that weren't in the drawings
- Moving the island once the cabinets are on order
- Choosing a pricier tile than the allowance covers
- Problems that were plainly visible when the quote was written, like a cracked foundation wall in an unfinished basement. Those belong in the base price.
Every change order should be written up with a price and signed before the work happens. Contingency spending should be written up the same way.
How to size and hold the money
- Start with the fixed construction price. Use a real quote, not a hoped-for number. Our published ranges give you a starting point: kitchens run $40,000 to $140,000+, main bathrooms $28,000 to $40,000, basements $25,000 to $100,000+, and whole-home renovations $100,000 to $250,000+, all before HST.
- Apply the percentage from the table. A main bathroom at $28,000 to $40,000 in a 1985 house, at 15%, means a contingency of about $4,200 to $6,000.
- Add HST. That $6,000 becomes about $6,780 once you add 13% HST.
- Keep it separate. Put it in a different account, or a separate line on your financing, so it doesn't drift into finishes.
- Release it in writing. Each draw should come with photos, a description of the problem and a price for the fix.
- Treat what's left as a bonus. Once the drywall is up and inspections have passed, the risk drops sharply. That's the time to talk about upgrades, not before.
What we see on site
After years of opening up houses across Halton and Hamilton, a few patterns keep showing up:
- Bathrooms are the most common source of surprises. Pull a 1970s tub and there's often soft subfloor at the drain end. In older houses we also find toilet flanges set on a cut joist.
- Kitchens hide electrical shortcuts. Expect junction boxes buried in walls, counter circuits shared with the dining room, and the occasional live knob and tube run feeding a ceiling light. Once that's open, the electrician has to make it right before the ESA inspection.
- Basements hide water history. Stained sill plates, efflorescence behind old panelling, and a floor drain that has never been scoped. Finishing over these is how you get mould.
- Removing walls in older homes rarely matches the drawing. Plumbing vents, ductwork and wiring usually run through the wall nobody expected. Rerouting them costs money, so it belongs in the contingency.
- The biggest overruns aren't hidden conditions. They're scope creep: a series of small "while you're at it" changes, each reasonable on its own. That's why change orders and contingency need separate lines in the budget.
On a whole-home renovation we'd rather spend a few hundred dollars investigating during design than find the same thing later with a crew standing around waiting.
How to shrink the contingency you need
Every unknown you turn into a known lets you lower the percentage you hold back. Before you sign:
- Get an electrical assessment from a Licensed Electrical Contractor. That means checking the panel size, what wiring is in place and whether the service can carry the new loads.
- Camera the main drain. This matters most before a basement or bathroom job in a house more than 50 years old.
- Test for asbestos. Sample plaster, drywall compound, flooring and pipe wrap in any pre-1990 house, plus vermiculite if it's in the attic.
- Check your water service. Look at the pipe where it enters the house near the meter, and use the City's free lead testing if you're in Toronto.
- Open small inspection holes. A 150 mm opening in a closet ceiling or behind a toilet tells you a lot about joist direction, framing condition and what's running through the space.
- Finish the design before you sign. Complete drawings and selections cut down on change orders, which keeps the contingency for what it's meant to cover.
For home additions, add a geotechnical check or a test pit if the soil or the existing foundation is in doubt. Footings that need to go deeper are one of the few surprises that can run into five figures.
Planning your number
Start with a realistic base price, then add the contingency from the table above. For a kitchen or bathroom, our kitchen cost estimator and bathroom cost estimator will give you a base figure in a few minutes. Add the percentage that matches your house's age, and you'll have a budget that holds up once the walls come open. For a whole-house project, start with our Oakville home renovation and Burlington home renovation pages.
