Logo Cardis

Does renovation pay off for a successful sale of your property?

Rénovation

First of all, the objective is to give a favorable impression of your property to a potential buyer. Scratched parquet floors, a removed carpet or dirty walls can complicate a sale. You also better avoid discouraging them with the fear of having to carry out major and expensive work before you can move in.

In fact, renovations can significantly shorten the time it takes to complete a sale. For example, we recall a client who had been looking to sell a perfectly located house for a period of time. He was struggling to convince potential buyers because of the lack of an additional one bathroom upstairs. One day, he decided to convert a large closet on the first floor into a bathroom and only a few months later, the house was sold..

But be careful, not all renovations are good to take. Useful works are those that are visible and meet a real need. Installing solar panels on the roof of one's house is certainly an interesting approach, but most buyers are not very sensitive to it. On the other hand, refreshing the surfaces (walls, floors) is an inexpensive measure that gives a positive impression, thus comforting the future buyer in his decision to invest in your property.

Carrying out major work prior to a sale can sometimes even be counterproductive. There is a good chance that the kitchen that has just been redone, for example, doesn't meet the buyers taste. Before starting any investment in renovation, it is therefore worth asking the opinion of an experienced broker who can indicate whether or not it is useful. Once again, the Cardis Sotheby's International Realty brokers are at your disposal.

Does your renovation work have a big impact on the selling price of the property? To be clear, they generally have a limited impact on the increase in value.  At most, the owner can hope to add the cost of the work to the sale price and thus recoup his expenses. First of all, renovations mainly accelerate the sale process, but do not really help making more money with the sale. 

Can the renovations affect your taxes? Yes, however, the costs of the work can be deducted from the real estate gain realized at the time of the sale. This reduces the tax on the latter. Work that is considered essential - such as changing a broken furnace or repairing a leaking roof - can be deducted from taxable income because the purpose of the work is to preserve, not increase, the value of the property. Most cantons offer a choice between a lump-sum or effective deduction. Work to improve the energy efficiency of your home, for example by installing solar panels on the roof or improving the thermal insulation of walls and windows, is also tax deductible. Larger renovations, on the other hand, which lead to an increase in the value of the property, are not. On the other hand, the additional interest that the owner will have to pay on his mortgage, since it will be increased, can be deducted from his tax bill.

If the urgent work obviously has to be done on the spot (for the sake of comfort and to avoid generating more serious damage, which will be much more expensive to repair in the end), it is more profitable to concentrate it in the same year, from a tax point of view. If they are almost non-existent, the lump-sum deduction will be chosen to maximize the amount you are entitled to deduct from your tax bill. On the other hand, it is better to spread out more significant renovations over several years. This will prevent your taxable income from reaching a certain level and being taxed at a higher rate over several tax periods. Overall, you will pay less tax than if you had deducted everything in the same year.

Continue reading

How to succeed in your renovations?

Renovating a property is both a difficult and very personal task. It can be aimed at fighting against the signs of time or improving the comfort of one's home. It can also be indispensable, as when the boiler has given up or a piece of the ceiling has collapsed. But how do you go about it? Cardis Sotheby's International Realty answers your questions.

Learn more
Leave us a message!