Invest in your home
October 11th 2008 03:50
"Renovation is becoming an increasing trend as homeowners find government charges and property taxes, for which they receive nothing when they buy their home, make up a considerable proportion of the $50,000 to $60,000 it costs to move house," said Ron Tanton, Queensland State Manager of Archicentre.
"Improving the family home through renovation before sale is in many cases the last chance for people who will retire towards the end of the decade, to increase their retirement funds without incurring tax before they scaled down to a smaller home."
Mr. Tanton said that carefully carried out with clever design, a cost analysis and a carefully constructed building contract, a renovation can produce tens of thousands of dollars extra when the home is sold to boost retirement funds and quality of life.
"In the current financial market there is little hope of putting funds to work safely and effectively through any other way without considerable investment risk. For people wishing to increase their retirement monies, savings alone may not be the answer."
"The wave of emerging retirees will see an increasing trend in this type of renovation capital leveraging."
A discussion paper for the Rudd Government's pension review earlier this year outlined a bleak future for Australia's ageing workforce, with the majority of 80 per cent of Australians aged 65 and over getting the pension and relying on it as their major income source.
"With a quarter of Australia's population expected to be 65 or more by 2047, the use of equity in the family home to boost retirement funding through renovation will become an important national wealth release strategy."
"With the current financial crisis fresh on the minds of all homeowners this strategy is likely to become far more popular over time with younger people and couples with families."
Archicentre has experienced a dramatic increase in its renovation design concepts for homeowners in the past twelve months as people are focusing on investing in their homes by updating kitchens and bathrooms, adding a second storey or creating indoor outdoor flexible living areas.
"The strategy for people is for them to get the original design right and they won't be disappointed or out of pocket," Mr. Tanton said.
"The best policy is for homeowners to make prudent design choices; obtain realistic competitive quotes; and manage the building process. Free help is available at seminars and people should seek independent help before getting started."
Information from Archicentre
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