A Typical Asbestos Removal Costs 1.7 Times a Bathroom Reno's 20% Contingency

A percentage contingency grows with the job, and a surprise has a fixed price

NAB advises renovators to set aside a contingency of 10 to 20%. More people are taking on the risk. NAB says demand for renovation loans rose 16% in the year to 30 April 2026, and 25% in Queensland. The ABS put residential alterations and additions work at $4,119.0 million in the June quarter of 2026, up 12.6% on a year earlier.

A percentage buffer scales with the size of the job. At Going Rate's prices, 20% of a bathroom renovation ($22,500) is $4,500. A typical licensed asbestos removal ($7,750) costs about 1.7 times that buffer, or about a third of the bathroom price itself.

Run the same removal against a full-house renovation ($380,000) and it comes to about 2% of the job. A 20% buffer there is $76,000 at Going Rate's prices, enough to pay for that removal 9.8 times. The same asbestos bill wipes out the buffer on a small job and barely dents it on a large one.

Asbestos is the latent condition to price first

ASSEA, the Asbestos and Silica Safety and Eradication Agency, says one in three Australian homes still contains asbestos. Its chief executive says a home built before 1990 has a high likelihood of containing it, and that more than 3,000 building products used it. SafeWork NSW gives the same one-in-three figure and the same 1990 cut-off.

In NSW, the law decides what happens once a strip-out finds asbestos. SafeWork NSW says any friable asbestos, or more than 10 square metres of non-friable asbestos, needs a licensed removalist. The City of Sydney says that under NSW regulations, more than 10 square metres of bonded asbestos needs a Class B licensed removalist, and any friable asbestos needs a Class A licence. A bathroom demolition then becomes two jobs, with a licensed trade on site before the builder can carry on.

Going Rate prices a typical licensed asbestos removal ($7,750) as a whole job, across a band of sizes and sites, and a removal limited to one bathroom can cost less. The comparisons in this report use the typical job because that is the amount a homeowner should hold before the walls come down. Ordinary waste such as a skip bin ($550) is a known cost and belongs in the base budget.

The smaller the room, the bigger the bite

Set a typical licensed asbestos removal ($7,750) against a 20% buffer on each common job, at Going Rate's prices. On a laundry renovation ($8,000) the buffer is $1,600 and the removal costs 4.8 times as much, about 97% of the laundry price itself. On a bathroom renovation ($22,500) the buffer is $4,500 and the removal costs 1.7 times as much.

On an ensuite renovation ($26,000) the 20% buffer is $5,200, and the removal costs 1.5 times that. On a kitchen renovation ($32,500) the buffer is $6,500, and the removal costs 1.2 times as much. Only on a full-house renovation ($380,000) does a 20% buffer cover the removal with room to spare.

Asbestos is one condition among several. Smart Property Investment lists old wiring, tired plumbing, water damage and out-of-square framing as faults that stay hidden until the old kitchen comes out. Old wiring found behind a wall can lead to a partial or full rewire ($14,300), which Going Rate's report on the house you never see covers in detail. Any one of these lands on a small job at full price, because the trade charges for the fault whatever the size of the room.

The owner's upgrades bust more budgets than the surprises

Houzz surveyed almost 14,000 Australian homeowners about their 2015 renovations. It named the top budget busters as choosing more upscale products and materials (44%), products or services costing more than expected (42%) and unexpected construction issues (33%). The owner's own choices came ahead of anything found inside the walls.

The same Houzz study found 27% of renovators went over budget, and 33% set no budget at all. The data is old, and it is the only Australian survey this research found that ranks the causes of overspending. It fits the comparisons above. A latent condition is a fixed bill, so on a large job the buffer absorbs it, and the run of small upgrades chosen room by room eats the rest.

When a dearer tile or tapware choice pushes a prime cost item past its allowance, the contract can add a margin to the difference.

The 20% margin on allowance overruns

Most renovation contracts carry two kinds of allowance. HIA describes a prime cost item as a fixture or fitting the owner selects, such as a vanity or tapware, and a provisional sum as work the builder cannot price at signing, such as excavation, rock removal or tiling labour. Both sit in the contract as estimates.

HIA's guide to its NSW residential contract for new dwellings says that if the real cost of an allowance item exceeds the allowance, the builder bills the excess plus a margin, and that if no margin is stated it is 20%. HIA's worked example has an item allowed at $1,100 that costs $1,320. The owner pays $220 for the difference and $44 in margin, $264 in all. If the owner deletes an item, the allowance is credited back but the builder keeps the margin on it, and HIA says the builder does not have to disclose that margin.

Victoria sets tighter rules. Consumer Affairs Victoria says a contract must list each prime cost and provisional sum item with a breakdown of the estimate, state how any extra charge is calculated and the exact amount, and give the owner the invoices for those items as soon as possible. Ask for that list before signing in any state. The upgrades Houzz ranked first are billed through these clauses.

The 2% line and who pays for what the builder should have seen

Consumer Affairs Victoria says a builder needs no variation notice only when it reasonably believes the change needs no permit change, causes no delay and adds no more than 2% to the original contract price. On a bathroom renovation ($22,500) that line is $450 at Going Rate's prices, and on a kitchen renovation ($32,500) it is $650. A typical licensed asbestos removal ($7,750) is about 17 times the bathroom figure, so it has to come through as a written variation.

Consumer Affairs Victoria also says clients should not pay for variations that fix problems the builder should have identified before starting, and gives rock that foundation data would predict as the example. An owner has 5 business days to dispute in writing a variation ordered by a building surveyor or other authorised person. Settle in the contract whether asbestos in a pre-1990 house counts as foreseeable, and attach an inspection report.

Other states also require variations in writing. The NSW Government says variations must be in writing, signed by both parties and attached to the contract. In Queensland the builder must put a variation in writing before the work starts or within 5 business days of agreeing to it, whichever comes first, and the QBCC says undocumented variations frequently cause budget blow-outs and building disputes. Fixed costs such as a building permit ($6,250) belong in the base budget, so the contingency is kept for what nobody can price yet.

Size the buffer to the house

For a small wet-area job in a home built before 1990, set the contingency in dollars. A buffer at least as large as a typical licensed asbestos removal ($7,750) on a bathroom renovation ($22,500) works out to about 34% of the job at Going Rate's prices, well above NAB's 20%. On a laundry ($8,000), the same dollar buffer is nearly the price of the room again. On a full-house renovation ($380,000), a percentage buffer already covers it, and the Houzz ranking points to the owner's own upgrades as the bigger risk.

Book an asbestos inspection before demolition, so the removal is either priced into the contract or ruled out. Ask the builder for every prime cost and provisional sum allowance and the margin that applies to overruns. Make your own upgrade choices before signing, while they cost the supplier's price and carry no variation margin.

Building costs are still rising. The ABS says house construction prices rose 5.9% in the year to the June quarter of 2026. The Insurance Council's Insurance Catastrophe Resilience Report, as reported by Insurance Business, put the rise in Cotality's Cordell Construction Cost Index at about 30% over the five years to March 2026, against about 24% for consumer prices. A quote that sat for months before signing may need a fresh look at the allowances.

Common questions