You end up paying more by waiting
A renovation can boost not only your quality of living, but it can also increase the value of your home. In addition, you can, for example, save a lot on energy by having heat-insulating windows and an insulated facade installed. This will not only save you money, but it will also help protect the environment. Even though a renovation or conversion offers many advantages, you should still think it over carefully, as the costs can easily run into tens of thousands of francs, depending on the scope of the renovation. Think about how much renovation work you need and want, and find out more about renovation promotion programs. Would you like to start saving now for future renovations? Take a tip from us: every year you should set aside at least 1 to 1.5 percent of the insured value of your home. That way, you will be able to have your home painted in 10 years’ time without feeling any financial stress.
Value-preserving and value-enhancing investments
The tax authorities distinguish between value-preserving and value-enhancing renovation work. If you want to remodel your bathroom that was originally from the 1950s or 60s, the tax authorities will most likely call this a value-preserving measure. In most cantons and for your federal tax, you will be able to deduct the money you spend on this renovation when calculating your taxable income. However, if you convert your bathroom into a wellness oasis with a sauna and whirlpool, your expenses will be counted as a value-enhancing improvement and will therefore not be tax deductible.
Value-enhancing renovations can also have some tax advantages
Nevertheless, you should always keep your invoices and receipts for renovation work. If you sell your home, the value-enhancing investments can be deducted when calculating real estate capital gains, saving you money on your taxes. Value-enhancing improvements are also important for your home financing. In order to finance renovations, it can make sense to increase your mortgage. But this is only possible if the current ratio between mortgage and property value is low; in other words, if the loan-to-value ratio has not been fully exploited. Value-enhancing improvements can thus give you more flexibility for increasing your mortgage.