Home extensions and second storey additions gain popularity in Perth as homeowners find better ways to spend their money.
The rise in property prices has had a side effect that many in the home market haven’t considered: as home prices have risen, stamp tax duty has risen proportionately. In Perth, a $540,000 home, which is “average” in some market segments, would cost nearly $20,000 in stamp duty. In Sydney, where the “average” price in many areas is $1 million, stamp duty would be nearly $41,000 on an “average” home.
Consequently, many homeowners, in Perth and across Australia, have decided to take a serious look at a home renovation, such as a home extension or a second storey addition, as a way to expand their living space. There is no stamp duty on a home renovation. This makes it possible for homeowners to save the money they would put into stamp duty and put it into their homes instead.
Craig Johns is the Director of Next Level Extensions in Perth. According to Mr Johns:
“It costs a lot of money to sell your old home, buy a new home and move. It takes a lot of time and effort, as well. If you are trying to figure out whether to buy up or renovate, take a look at the costs and see what works best. The formula is simple. Get an estimate of how much it will cost to have a second storey addition or a home extension built. Then, figure out how much it will cost to buy, sell and move, including fees going to lenders, real estate commissions, council fees and stamp duty.”
Mr Johns continued, “For most people, it will cost less to add on to their current home than it does to move up in the market. In addition, the value of their current home rises due to the renovations and additions, especially if they keep the home for a longer period of time.”
Homeowners who renovate instead of moving are finding many more benefits in renovation. When people look for another home, many tend to look for their “dream home.” Most established properties fall short in at least one facet for those looking for a “dream home.”
When a homeowner decides to renovate with a second storey addition or a home extension, they have carte blanche when it comes to design. They can literally turn their current home into their dream home, especially if they do the addition first and then renovate the original portion of their home to reflect what they want in a dream home.