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Getting a Tax Refund? Think About Home Improvement

Using your tax refund for home improvement may increase home value. These upgrades, recommended by professionals, start at under $100.
Jan. 6, 2020
Homeownership, Mortgages
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A new calendar year signals the start of a new tax season — which means many Americans can look forward to an average windfall of nearly $3,000 in the form of a tax refund, according to the IRS.

Splurging on a vacation or iPhone 11 is tempting, but as a homeowner, sinking refund cash into your house may be smarter, especially if debts are already under control, says Lisa Greene-Lewis, a tax expert at TurboTax.

Even small home improvements can nudge home value — and your quality of life — in a positive direction. But how do you decide what to do?

The first question to ask is “How long do I plan to stay in the home?” The answer dictates how much you should spend on home improvement and which home renovation projects to prioritize.

If you’re staying put, focus on changes that make your life better and improve value. Fix what’s broken before thinking about curb appeal.

Here are some home improvement ideas in several price ranges so you can put that tax refund to work.

Watch your home value grow

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Home improvements starting at under $100

Replace cabinet hardware. Changing knobs or handles is fairly simple, but gives the whole room a new look, says Colin Shaw, owner of Shaw Remodeling in Niantic, Connecticut.

Seal the driveway. You’ll reduce unsightly cracks and slow deterioration of the concrete or asphalt.

Get the HVAC system serviced. Regular cleaning can add 10 years to the life of your system, says Laura Hales, a real estate agent and owner of Hales and Associates in Overland Park, Kansas.

Home renovations around $500

Add a tile backsplash. Backsplashes provide an instant transformation at a fraction of what a full kitchen remodel costs.

Refresh interior paint. New paint in main rooms brightens the whole house, and doing it yourself saves on labor costs, Hales says.

Insulate the attic. Buyers love energy efficiency, and you’ll love lower utility bills.

» MORE: The financial perks of energy-efficient homes

Home upgrades for about $1,000

Get a new front door. Shaw recommends fiberglass doors that don’t swell or contract with the weather.

Replace inefficient appliances like the water heater, toilet, refrigerator or dishwasher.

Tile the bathroom floor. Heavy foot traffic leaves flooring dingy. Opt for bright, easy-to-clean tile.

» MORE: 5 ways to save on bathroom remodel costs

Home value boosters for around $3,000

Install new kitchen countertops. Almost all buyers want granite, quartz and other solid surfaces, Hales says.

Replace the garage door. An upscale garage door recoups around 98% of its cost in improved home value, according to Remodeling magazine’s 2019 Cost vs. Value report.

Enhance your landscaping. Stone pavers, a fire pit or exterior lighting boost curb appeal and functionality.

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