How Do Local Permits and Inspection Affect Furnace Cost?

inspector reviewing permit and inspection checklist

Most cities and counties require you to obtain a permit and have your new furnace installation inspected. This is true whether you hire a contractor to install it or do it yourself, if you’re able to act as the homeowner-contractor in your region, and still receive the inspection from local authorities.

Q: How Much do Permits and Inspections Affect Furnace Cost?

There are two ways that a permit and inspection can affect furnace cost:

Getting a permit is generally required for all types of furnaces. Gas, Electric and Oil. Let’s explore each of these topics and their potential costs.

Furnace Installation Permit & Inspection Cost

These permits are also called mechanical permits. Permit fees also cover the cost of the inspection.

For All Furnace Types

All furnaces are going to require some of the same type of inspections. These inspections are typically done in the same visit by the same inspector, and in most cases you and/or your contractor must be present to walk through the inspection.

The inspector will review:

  • Overall installation of the unit, per manufacturer and locality requirements.
  • Electrical connections and requirements, as related to current code.
  • Duct and plenum connections to your home existing ductwork when applicable.

Gas Furnace Specific Inspections

For gas furnaces, the gas line, furnace venting for both the exhaust flue, and fresh air requirements will be inspected to ensure there is no risk of explosion or carbon monoxide leak. This protects you and anyone who might buy your home in the future.

    • Inspecting the venting / fresh combustion air systems.
    • Inspecting the gas line hookup and emergency shut off.

Specific to Electric Furnaces

Electric furnaces, usually used in warmer climates and/or matched to heat pump systems, do not require as many inspections as other types. There are no gas or oil lines to deal, so most of the inspection is limited to the install, and the electrical syste.

  • Inspecting the electrical connections, circuit breakers, panel boxes and disconnects.

Oil Furnaces

Finally, Oil Furnaces. While they may be losing popularity and are quickly being replaced with gas or electric systems, they do still exist in the form of boilers or oil fired forced air systems.

  • Inspecting the oil tank itself.
  • Oil line connections.
  • Flue operations for both fresh and exhaust.
  • If a boiler, they will inspect all connections to the closed loop.

When a replacement AC Unit is Involved

Fortunately, there are not many extras when it comes to having your entire system replaced. In fact, the same inspector will complete the inspection and in most cases, the only added requirements are in the electrical inspection, and the plumbing of the condensate drain line.

Mechanical permit cost varies widely across the country.

For example, the City of Detroit charges $148 for a residential furnace installation permit. If a new gas line is run for the furnace, the permit costs $98.

In Oklahoma City, the furnace installation permit cost is just $31. It’s $26.50 for the inspection of a new gas line.

The cost of living in your area is a major factor in mechanical permit cost. Fees tend to be higher in the NE and NW regions of the country. The lowest fees are found in rural areas and smaller metropolitan areas like OKC.

If an inspection fails, then you can expect to be charged for a re-inspection once the reason for failing the installation is corrected. The cost can be as high as the cost of the original permit.

Who Pays for the Permit?

You ultimately do, of course.

But on a practical level, furnace installers usually “pull” the permit – apply and pay for it. The fee will be included in the installation estimate you receive. If DIY, then you’ll need to obtain the permit from your city or county. The departments that supply permits go by various names – building, building codes, development, etc.

Potential Costs of Updating, Affected by Permit and Inspection

These costs apply to homeowners in two circumstances – those who own an older home that hasn’t been updated and those making a major change to their HVAC system.

Updating an old home: This can be expensive depending on the extent of the renovations required. Here are common updates for older homes and their cost range.

    • $850 – $2,000 | Replace an outdated electrical panel with a 200 amp panel
    • $150 – $300 | Add a single 30-amp circuit without replacing the panel
    • $18 – $30 per foot | Cost to install new gas line
    • $2,000 – $4,500 | Cost to replace ductwork
    • $250 – $600 | Cost to seal and insulate ductwork rather than replace it
    • $225 – $1,000 | Cost to resize the supply plenum and/or the return duct
    • $250 – $500 | Upgrading exhaust flue, as well as fresh combustion air to furnace

Upgrading your HVAC system: Even in newer homes, upgrades must sometimes be made.

For example, if you replace an old 75% efficient furnace with a 97% model, the furnace will be smaller in physical size, requiring modifications to the duct system, as well as changes in how the fresh air comes in and flue gasses are exhausted out of the home.

Why is the unit smaller? Not only do newer furnaces take up smaller physical space, but in the case of upgrading to a higher efficiency model, fewer BTU’s may be required as well due to their higher AFUE. Think of AFUE as the ROI on each dollar spent to fuel the furnace. Higher AFUE mean more heat into your home, at a lower cost.

  • 80% AFUE – .80 cents of heat for every dollar spent on fuel.
  • 95% AFUE – .95 cents of heat for every dollar spent.

Downsizing the furnace by nearly 25% will likely mean that changes must be made to the ductwork, the combustion fresh air and exhaust flue systems, etc. In some cases, you’ll be OK to modify a small percentage of the duct, like the plenum only. In others, the minute you replace the plenum, the entire duct system needs to be brought up to current code.

So, as you see, the answer is not as clear as a yes or no. It’s best discussed with a HVAC professional, who knows all the code requirements, and can assure the job is done right and provides safety for your family in the long term, as well as a properly installed and up to date mechanical system.

The Bottom Line

Question: Does a permit affect the cost of furnace installation?

Answer: Yes. It could be just the permit cost alone, or secondary costs associated with updating your mechanical, to stay within building and mechanical codes.