Renovation Costs: Tips for Calculating the Investment
How much does it cost to renovate your house or your apartment? A realistic budget is key to being able to fully enjoy your upgraded home. Learn how to correctly budget the investments for a renovation and where you can save money.
In your mind, the images of a freshly renovated or remodeled home feel real. But there is still something missing. One of the first steps of a renovation or remodeling project is the creation of a budget. Once the scope of the construction activity is known, a rough plan should be drawn up to determine the approximate costs.
For a rough overview of what it costs to renovate a house, you can use reference values. An online calculator can be useful, or you can also have an architect or builder-owner advisor put together a rough cost estimate. In a medium-sized, single family dwelling, replacing windows should cost between 30,000 and 50,000 Swiss francs; a new bathroom, including tiles, costs 20,000 to 25,000 Swiss francs, and you'll shell out 25,000 to 40,000 Swiss francs for a completely remodeled kitchen.
Before the start of the project, it is advisable to work out a specific financing solution with the bank. Together you can examine the possibility of using your own equity capital as well as receiving a credit increase. If relevant, you can apply for funding for energy-related refurbishments and reduce costs.
Appraisers Can Assess Renovation Costs
When it comes to costs, it is worth taking a look to the future. How will the renovation affect the value of your home? Sometimes the overall renovation costs do not lead to an increase in value. Official appraisers can help you determine the future market value of your property.
A cost estimate, detailed planning documents, and other information related to the property's value, about the site and location, for example, form the basis of a project valuation.
An assessment like this can encourage you with your project. Sometimes it also means that discrepancies in the cost estimate or in the planning are uncovered and you have to rethink your plans. First and foremost, though, this assessment is used to calculate the property's new market value after the planned construction activity.
Save on Taxes When Renovating
Ultimately, comprehensive financial consideration of renovations must also include the individual's tax burden. You can deduct value-maintaining expenses from your taxes as property maintenance costs. So, for example, homeowners who pay the cost of repainting their homes out of their own pockets can declare those expenses on their tax returns.
The deciding issue is in which tax period the value-maintaining expenses will be incurred. Instead of deducting all costs in just one year, it may be useful to distribute the renovation work over several years for sustained tax savings. This is easy to plan when renovating. However, if a renovation is needed urgently, it is advisable to complete it immediately, otherwise dilapidated building elements could negatively impact the entire property.
Taxes can also play a significant role in more extensive renovation that enhances the value of your home. This is because you can deduct the additional debit interest incurred by your increased mortgage. This lowers your tax burden. The imputed rental value, debt levels, and new property value are other factors that have an effect on tax planning for renovations.
In a medium-sized, single family dwelling, replacing windows should cost between 30,000 and 50,000 Swiss francs; a new bathroom, including tiles, costs 20,000 to 25,000 Swiss francs, and you'll shell out 25,000 to 40,000 Swiss francs for a completely remodeled kitchen.