Why it may be worthwhile to spend your tax refund on your home

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It’s tax season – and for a lot of customers, the time of yr once they hope for a refund from the SA Revenue Service that can give their budgets a Summer enhance.

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“And getting money again from SARS is at all times a trigger for celebration,” says Gerhard Kotzé, MD of the RealNet property company group, “so it is admittedly tempting to spend it on “spoiling’ your self or your household with a fantastic outing, a vacation or perhaps some new ‘bling’.

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“But for householders, it makes extra sense to make investments any tax refund in your home and leverage additional financial savings, even when this doesn’t appear very thrilling proper now.”

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He says that the very first thing householders ought to take into account doing with a tax refund is to use it decrease the capital portion of their home mortgage, as a result of this might assist them save hundreds of rands in curiosity expenses over the lifetime of the mortgage – particularly in the event that they make a behavior of doing it yearly.

“If you had a 20-year home mortgage of R1m at 7% curiosity, for instance, only one further lump sum fee of R2400 this yr would minimize the mortgage time period by a month and prevent virtually R7600 value of curiosity.”

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As a house owner you may, nevertheless, need to spend your tax windfall to assist fund one thing extra instantly gratifying. In this case, says Kotzé, good selections embrace:

  • A second toilet to make life simpler now and raise the worth of your home when it is time to promote;
  • A brand new coat of paint that can preserve your future upkeep prices down;
  • Improvements to your safety system that can decrease your short-term insurance coverage premiums; and
  • Roof insulation to assist preserve your electrical energy payments down.

He says that rising municipal service expenses may additionally immediate householders to use any tax refund this yr to assist make another adjustments relating to electrical energy and water consumption. These may embrace:

  • Switching to long-lasting and low-power LED lighting and bulbs wherever doable;
  • Installing faucet and bathe aerators and low-flow bogs;
  • Replacing an previous power-guzzling fridge or washer with an energy-star rated equipment that makes use of a lot much less electrical energy; and
  • Installing a water storage tank to save all of the rainwater that runs off the roof and minimize their consumption of municipal water.
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“Or when you really feel you actually ought to ‘splurge’ on one thing new, why not take into account a photo voltaic geyser or a number of photo-voltaic panels so as to begin changing your home to run on free power?”

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