Understanding Builder Profit: Why It Matters for Your Home
- Suzy Albornoz
- Nov 26, 2025
- 5 min read
Updated: Jan 5
If you’re planning to build a new home or complete a major renovation, you’ve likely asked yourself this at least once:
👉 “Why does my builder charge so much?”
👉 “Is my contractor making money off my project?”
👉 “Should I be worried about their markup?”
Here’s the truth most homeowners don’t hear often enough:
Yes, your builder makes money off your build… and that’s actually a very good thing.
A builder who isn’t making a healthy, sustainable profit is a builder who cannot properly manage your project, protect you from risks, or stand behind their work long after you move in. In fact, low-profit builders are often the ones who cut corners, disappear mid-project, or leave homeowners with expensive problems down the road.
This article breaks down why builder profit exists, what it covers, why it protects YOU, and what a fair and standard builder profit margin is in the Greater Toronto & Halton Region.
What Actually Goes Into Building a Home?
Most homeowners only see the materials and labour happening on site. But a professional build includes dozens of moving parts behind the scenes—many of which protect you.
Below are the essential components builders must manage:
✔️ Materials
Your builder fronts the cost of lumber, windows, roofing, siding, insulation, HVAC, plumbing, electrical supplies, hardware, finishes, and more. They’re responsible for ordering, storing, inspecting, and replacing anything that arrives damaged or delayed.
✔️ Labour
This includes carpenters, roofers, framers, drywallers, electricians, plumbers, HVAC technicians, siding installers, flooring crews, painters, and more. Builders pay these professionals weekly—long before the homeowner pays the final bill.
✔️ Project Management & Scheduling
Coordinating 15–25 trades, ordering materials at the right time, booking inspections, and keeping everything moving requires full-time oversight. Delays cost money—good project management avoids them.
✔️ Quality Control
A reputable builder inspects every phase of the build to make sure the finished home meets code, manufacturer requirements, and industry standards.
✔️ Warranty Administration
Good builders stand behind their work for years. This includes callback labour, service repairs, and long-term customer support.
✔️ Licensing & Mandatory Registrations
In Ontario, legitimate home builders must be Tarion registered and licensed through the Home Construction Regulatory Authority (HCRA).
✔️ Insurance & Liability Protection
Builders must carry:
WSIB for workers
Commercial liability insurance
Builder’s risk insurance
Vehicle & equipment insurance
All of these protect YOU, the homeowner.
✔️ Office Operations & Overhead
Every builder covers expenses like:
Administrative staff
Bookkeeping & accounting
Trucks, tools, equipment
Fuel, storage, jobsite rentals
Software (estimating, scheduling, safety, etc.)
Legal compliance
Safety training
These costs exist regardless of project size.
Why Choosing a Tarion-Registered Builder Is Paramount
Tarion isn’t just a logo—it’s your legal protection as a new homeowner.
A Tarion-registered builder guarantees:
✔️ Enforced warranties (1-year, 2-year, and 7-year coverage)
✔️ Proper licensing through HCRA
✔️ Verified experience and financial standing
✔️ Protection against unfinished work and major defects
✔️ Access to dispute resolution if something goes wrong
If a builder isn’t Tarion-registered, that’s a massive red flag—and often tied to builders who don’t charge enough to operate properly.
What Does Builder Profit Actually Pay For?
A builder’s profit is NOT pure “take-home income.” It covers critical responsibilities that protect the homeowner, such as:
✔️ Administrative labour (office staff, coordinators, service teams)
✔️ Long-term warranty obligations
Good builders are still answering your calls years after the job is complete.
✔️ Liability coverage & insurance compliance
Builders’ insurance protects homeowners from accidents and damages.
✔️ Risk buffer
Construction is unpredictable—profit ensures the builder can absorb issues (weather delays, damaged materials, trade shortages) without cutting corners.
✔️ Proper supervision & quality assurance
Profit pays for the skilled project managers who make sure your home is built correctly.
✔️ Professional development & training
Top builders constantly update their skills, safety training, and building knowledge.
Red Flags: What Happens When a Builder Isn’t Making Enough Money?
Low-profit builders often compensate in ways that hurt homeowners:
🚩 Delays—because trades won’t prioritize low-paying builders
🚩 Poor communication—too overwhelmed, understaffed, or disorganized
🚩 Cheap materials—because they can’t afford better
🚩 Unskilled labour—hiring whoever is cheapest
🚩 Rushed work—corners get cut to move on to the next job
🚩 No warranty help after the job is done
🚩 Lack of insurance or licensing
🚩 Cash-only payments or suspicious pricing
When a builder’s numbers don’t add up, the homeowner pays the price.
What Is a Fair & Standard Builder Profit in the GTA & Halton Region?
Construction costs vary, but in the Greater Toronto + Halton construction market, these are the industry-standard ranges:
Typical Builder Profit Margins:
Net Profit: 10%–15%
Overhead Costs: 8%–12%
Total Markup (Profit + Overhead): 18%–25%
This is widely considered the healthy, sustainable range for a reputable builder.
What Influences That Percentage?
✔️ Years of experience
✔️ Reputation and track record
✔️ Degree of difficulty (steep lots, narrow lots, custom designs, heritage homes)
✔️ Size of the project
✔️ Material prices & market fluctuations
✔️ Risk level (structural changes, basement underpinning, custom builds)
✔️ Permits and inspections complexity
✔️ Trade availability and current demand
✔️ Warranty expectations and long-term service
A builder with decades of experience, strong trade relationships, and a proven record of quality will charge more—and they should.
A Good Builder Isn’t the Cheapest—They’re the Most Reliable
When you’re investing in your home, the cheapest option rarely ends up being the most affordable.
A good, trustworthy builder is the one who:
✔️ Charges enough to do the job correctly
✔️ Pays skilled trades fairly
✔️ Uses proper, code-approved materials
✔️ Provides clear communication
✔️ Stands behind their work long after move-in
✔️ Operates legally and transparently
✔️ Has the financial health to finish what they start
Cheaper builders sacrifice quality. Good builders protect your investment.
Final Takeaway: Profit Isn’t a Bad Word—It’s a Safety Net
A builder making a healthy profit means:
🏡 Your home is built properly
🔧 Your materials are good quality
📅 Your project runs on schedule
🛠️ Your warranty is honoured
📞 Your follow-up calls get answered
🧾 Your builder can legally and financially operate
💯 Your investment is protected
A profitable builder is a stable builder—and a stable builder is exactly who you want building your home.
✍️ About the Author — Suzy Albornoz, Co-Owner, CanMac Siding Inc.
As a co-owner of CanMac Siding, I have spent over 30 years in the construction game. My upbringing involved working in my father's roofing, siding, and eavestrough business, and those formative experiences have greatly influenced who I am today.
From being on ladders and rooftops to dealing with suppliers, scheduling jobs, talking to homeowners, solving on-site problems, and watching the realities of construction unfold day after day — I learned this industry from the ground up.
Although my specialty today is siding and exterior finishing, my decades surrounded by trades, homeowners, inspectors, and builders have given me a deep understanding of how construction really works.
I’m not an expert in every trade — but I’ve seen enough to know what makes a good builder, what homeowners should watch out for, and why fair pricing is essential to a successful, stress-free project.
At CanMac Siding, my goal is simple:
Do the job right, be honest, and help homeowners make smart decisions about their biggest investment — their home.
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