If the cost between a TT and a TTS is off-putting then I'd say building a 500whp daily is not for you.
It is easy to squeeze 350hp from a TTS with little additional cost but going beyond that gets expensive. A better option is to step up to a TTRS.

If you plan to strip the car down and replace everything I guess it doesn't matter, get the cheapest donor car you can find. Still, at the end of the day a TT is a TT, a TTS is a TTS and a TTRS is a TTRS when it comes time to sell.

IMO, If you (or your mechanic) have the experience necessary to fully build a high-performance motor you should be answering forum questions rather than asking them. Your block choice really depends on what you want to do and how much you want to spend.

 

500hp isn't really a "daily" on the 2.0Ts, IMO. I mean everyone considers "a daily" to be what they want it to based on their own feelings and opinions, but in mine this engine is no longer a daily when you're that far past ~400hp. Even at 400hp you're likely going to have to be at a turbo that's starting to sacrifice some low end output; at 500hp that's going to be 100% the case.

Just my opinion but if you want a "500hp daily" without having to worry about a lot of cost and work, buy a supercharged [B8] S4 and put pulley(s) and a tune on it. Or a 335i/340i/440i and do similar stuff--tune DPs, etc. If you love the TT though, either an RS or 3.2L would be better. The extra cylinder(s)/displacement make 500hp much more of a "daily driver" target than either the EA113 or EA888. The VR6 is a nice idea (and someone else has a pretty awesome build on one of these going on, on the forum) but the cost, work, complexity, and $$$ is gonna be much greater than something like an S4 where you just change the s/c drive put a tune on it and Bob's your uncle.

If you're dead set on building an EA113 (or EA888) for 500hp and calling it a daily, that's your prerogative--lots of ppl build them for that and more, sure. But in that case if you're already planning on BBK and all that? There's no reason to buy an S.

 

I would think getting 500hp out of a 2L engine would cost around $20K USD not including the cost of the car itself. I agree this would be a strange DD car to own.

Buy my 2012 Golf R. Already at 370hp and has Haldex AWD. Basically, a 4 door TTS with a modern entertainment system.