Q: We have decided to spend our tax refunds on our home, both for our benefit while living in it and also to add value when we sell one day. What are wise areas to spend on?
A: The first thing homeowners should consider doing with a tax refund is to use it lower the capital portion of their home loan, because this could help them save thousands of rands in interest charges over the life of the loan – especially if they make a habit of doing it every year.
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You may, however, want to spend your tax windfall to help fund something more immediately enjoyable.
In this case, good choices include:
• A second bathroom to make life easier now and lift the value of your home when it is time to sell.
• A new coat of paint that will keep your future maintenance costs down.
• Improvements to your security system that will lower your short-term insurance premiums. Rising municipal service charges may also prompt homeowners to use any tax refunds this year to help make changes relating to electricity and water consumption.
These could include
• Roof insulation to help keep your electricity bills down.
• Switching to long-lasting and low-power LED lighting and bulbs wherever possible.
• Installing tap and shower aerators and low-flow toilets.
• Replacing an old power-guzzling fridge or washing machine with energy star-rated appliances that use much less electricity.
• Installing a water storage tank to save the rainwater that runs off the roof and cut consumption of municipal water. If you feel you really should splurge on something new, why not consider a solar geyser or a few photovoltaic panels so that you can start converting your home to run on free energy? – Gerhard Kotzé, managing director of the RealNet estate agency group