The government’s HomeBuilder scheme allows certain home owners to apply for a tax-free grant of A$25,000 if they are spending between $150,000 and $750,000 renovating a home or building a new home. Eligibility criteria are strict.
The scheme has boosted renovation talk in some.
Here are some questions to ask yourself when trying to decide between renovating and moving – and how to add value to your existing home.
What adds value to a house?
Property market observers advise updating or renewing bathrooms or kitchens – even small fixes such as replacing a cracked or dated splashback, replacing a bath or adding skylights can go a long way.
Think about easy repairs that create an invaluable good first impression – a fixed-up fence, a new carpet or resurfaced flooring or even good old decluttering.
Factors to consider if you are thinking of renovating
How long till you retire? How secure is your employment? Thinking carefully about your earning potential between now and retirement will help you understand how what you can borrow and afford. If you are planning to stay, you will get the benefit and enjoyment of the renovations.
Do you need to stay close to school or work? If that is a consideration, renovating may be worth more to you than buying further out.
Look closely at what your property is worth (there are plenty of online calculators) and keep track of how much similar local properties with one extra bedroom or bathroom sell for. That will give you a sense of the value-add to your home equity that a renovation might represent.
Be honest with yourself about the total cost of renovation. There are myriad expenses not always initially apparent.
Find out what tax breaks, if any, you might be eligible for if you renovate to divide the family home into a smaller space (if you’re keen to downsize, or enhance the accessibility of your home, for example) and adding a self-contained granny flat.
The best option here is to seek advice from a tax specialist.