Calculate Construction Cost Using House Floor Area Ratio Formula

Building a house is a most special moment in everyone’s life. It’s a heavenly abode, where we all plan to save hard earned money to build, construct. When constructing or planning a home or any property it is important to calculate the construction cost of the house or the property to avoid any over-cost. A vital component in this calculation is the floor area ratio formula (FAR), which helps to identify how much you can build on a given piece of land. So, let’s understand what actually is FAR with its benefits when planning along with the example for better understanding. 

What is Floor Area Ratio (FAR)?

Floor Area Ratio is also known as FSI (Floor Space Ratio). The formula helps to create a perfect real estate planning such as helping to calculate the construction cost of a house. FAR is a ratio of a building’s total floor area to the size of the area of a land. Floor area ratio formula allows you with a maximum floor area to construct a plot on land, within your budget. 

FAR Formula

If you need the exact ca;cultaions, you must have to enter all the details more carefully for the exact optimal results. Let’s start with the calculations

FAR= Total floor area/ Plot area


  • The total floor area is the sum of all floors ares in the building
  • Total plot area is the area of the land on which the building is constructed. 

Lets understand the formula with an example for better understanding and vision. 

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Understanding FAR with an Example

Suppose you own a plot of land 1,000 sq. m and the local zoning specification on a floor area ratio index of 2.0/ which can be calculated as: 

Total buildable area= FAR* Plot area


Total buildable area= 2.0*1,000 sq. meters= 2,000sq. Meters

You can distribute this total buildable area across multiple floors. This means one can easily build the four-story building with each floor being 500 sq. meters or two floors reaching 1,000 sq. meters.

Benefits of using the FAR? 

The floor area ratio formula is important in urban planning and real estate development.

Here are the key benefits if using FAR: 

  • Optimal Land Use: Using floor area ratio formula helps to provide the vision of the maximum usage of land in the form of floors. It promotes the optimal density and helps to prevent the underutilization and overutilization of the space. 
  • Control Over Development Density: FAR is helping the urban planners control the density of development in the different areas. This can help to prevent overcrowding by reducing the strain on infrastructure, which ensures that areas maintain a balance whether it’s commercial, real estate or residential. 
  • Environmental Considerations: FAR regulations can incorporate green building practices by limiting excessive construction and promoting open spaces, thereby contributing to better air quality, reduced urban heat island effect, and overall environmental sustainability.

There are many more benefits as it is helpful when doing a good zoning and urban planning, to balance the urban growth and many more to calculate construction cost of a house.

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