Remodeling your home? Here’s how to plan your budget

From remodeling your bathroom to replacing your floors, calculate the costs of home renovation.
8 min read
If you fantasize about living in your dream home, then home renovation might be the perfect way to make your dream a reality. You don’t need to give your home a complete makeover—even just changing a small detail like the wall tiles or light fixtures can make a huge difference. A lot of people imagine renovating their homes but have no idea where to begin. That’s why we’ve put together this handy guide to budgeting your home renovation. Read on to learn about what costs you can expect, tips and inspiration, the VAT applied to home renovations, and how to organize your home renovation budget.

What’s the difference between home repairs and home renovation?

Before we dive in, it’s important to understand the difference between home repairs and home renovation. Home repairs mean fixing something in the house that isn’t working how it’s supposed to, like if the heating won’t turn on or water damage is collecting somewhere. When things like this happen, you’ll have to either fix it yourself or hire a professional. But this is considered a home repair, not a renovation.Home renovation means making a substantial change to your home in order to modify, improve, or modernize the space. If you have to make some home repairs anyway, you might decide that this is a good time to go ahead with a renovation, but that’s not strictly necessary. You can carry out home renovations whenever you feel the time is right.

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How much does it cost to remodel a house?

As you can probably imagine, if you’re planning on completely renovating a house from top to bottom, you’ll need a larger budget. You’ll also have to keep certain things in mind like the installation processes, the structure of the house, the project design, any required permits you might need, and, of course, the area (square meters) of the house.

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The kitchen and bathrooms tend to be the most expensive rooms to renovate because they require professionals from different fields—builders, plumbers, electricians, joiners, and tilers. In other rooms, you might be able to get away with hiring fewer specialists, or even doing the majority of the work yourself.In some cases, if the house is very old, you may need to carry out extensive renovation work, which will definitely increase the final cost. For example, replacing an entire heating or plumbing system is going to cost a lot more than just a few pipes or wires. Get a good idea of the scope of the work involved before you commit. That way there won’t be any expensive surprises.Below, take a look at an estimate for how much it costs to remodel a house, depending on the size. These estimates are based on the average costs for these kinds of renovations, so you should have a solid idea of the kind of budget you’ll need.

60-square-meter house€24,000
80-square-meter house€32,000
100-square-meter house€42,000
150-square-meter house€50,000
200-square-meter house€60,000
Remember that other important factors also come into play, such as the type and quality of the materials you want to use for the floors, walls, paint, or doors. Choose whatever suits your style—and your budget—best.

Home renovation inspiration

Tired of textured “gotelé” walls or the old-fashioned closets, but not sure exactly what you’d prefer? We recommend taking a look on Pinterest to find some inspiration. You’ll find plenty of original images on there that might spark your creativity and give you some new ideas on how to freshen up your space. You’ll find ideas for remodeling the bathroom, living room, terrace—everything right down to the pantry. You’d be surprised what you can do with even the smallest of spaces thanks to a little creativity. We recommend you create different Pinterest boards to save everything you like, and organize them by room. For example, devote one board to kitchen remodeling, and one to the living room, and so on. But proceed with caution—as soon as you step into the world of interior design and decoration, there’s no turning back.If you want to draw inspiration from the luxury mansions of the rich and famous, check out Architectural Digest’s YouTube channel. Here you’ll find the most eclectic mix of houses that can help you figure out which style suits you best. Just be prepared to feel a few pangs of jealousy or depression when you realize exactly how much some of these spaces cost.

How much does it cost to remodel an apartment?

Remodeling an apartment isn’t all that different from remodeling a house, since you have to consider many of the same concerns like space and budget. The main difference is that if you make any changes to the building’s shared elements, such as the terrace or windows, you must notify and obtain permission from the residents' association (comunidad de vecinos), in accordance with the Spanish Condominium Act. Even if you’re not going to make changes like this, it’s always best to consult the residents' association first to avoid any misunderstandings later.If you’re looking for a clear cut answer on how much it will cost to renovate your apartment, this is very difficult to predict, since there is so much variation among apartments. We’d recommend getting in touch with a home renovation company to get advice based on your specific budget and needs.However, we’ve put together a basic estimate of the cost per square meter for apartment renovations, so you can get a rough idea of how much money you will need. We suggest setting aside €5,000. For a total renovation, you’ll probably need between €400 and €650 per square meter. Plus you’d ideally have an emergency fund of around 10% or 20% of the overall budget to cover any surprises that may crop up.

80-square-meter apartment€36,000
90-square-meter apartment€40,000
100-square-meter apartment€45,000
120-square-meter apartment€54,000
150-square-meter apartment€67,500
200-square-meter apartment€90,000

How much does it cost to remodel a bathroom?

If you’re only interested in remodeling a single bathroom, you won’t need quite as much money. However, the overall price always depends on how many elements you’re going to change. For example, older plumbing installations still use lead pipes, which can release particles that alter the quality of drinking water. It’s now forbidden to install plumbing systems that contain lead. If you still have these outdated pipes, you should consider replacing them with newer ones—and replacing an entire plumbing system can be costly.Consider the most important points by asking yourself the following questions:
  • Do I need new plumbing?
  • Do I want to replace the bathtub with a shower, or vice versa?
  • Do I want to completely change the floor and ceiling tiles?
  • Do I need a new shower stall?
  • Can I upcycle old furniture and appliances or do I need to buy new pieces? Do I have to order custom made pieces or can I buy standard sizes?

Changing wall and floor coverings€30–50/m²
Upgrading the electrical system€200/m²
Replacing the plumbing system€18/hour
Installing new bathroom fittings (shower, toilet, sink, etc.)€2,000
Furnishing a bathroom€1,500
Renovating a bathroom of 4 m²€3,500
Renovating a bathroom of 6 m²€4,250

How much does it cost to remodel a kitchen?

As we already mentioned, the kitchen can be the one of the most expensive rooms in the house to remodel. The renovation involves electrical and plumbing installations, tiles, furniture, lighting, and electrical appliances. Again, it all depends on whether you want a partial or complete renovation.Did you know that the kitchen countertop can take up to 20% of the overall budget? Marble is the most common material used in these structures, but there are alternatives available that are much more environmentally and budget friendly, like bamboo.

5-square-meter kitchen€4,800
6-square-meter kitchen€5,100
7-square-meter kitchen€5,600
8-square-meter kitchen€6,400
10-square-meter kitchen€7,800
12-square-meter kitchen€9,000

Are home improvements tax deductible?

In this respect, you could enjoy some deductions for Personal Income Tax, or IRPF (Impuesto sobre la Renta de las Personas Físicas). If you want to renovate your primary residence, you can deduct a maximum of €9,040 per year. However, please keep in mind that you can’t include the expenses incurred for maintenance, repair, or minor cosmetic changes.

What VAT rate is applicable for home renovation?

The VAT applied for home renovation varies between the standard (21%) and the reduced rate (10%), depending on who’s requesting the work. If you’re a tenant requesting the renovation work, the reduced VAT rate will apply as long as the invoice for the renovation work is made out in your name.However, to enjoy this benefit, you’ll also need to meet the following criteria:
  • The invoice must be made out to an individual
  • The home must not have been renovated in the last 2 years
  • The worker’s building material cannot exceed 40% of the overall cost of the work
Before starting the renovation project, we recommend you contact a legal expert to get personalized advice and find out, in more detail, which home improvements are tax deductible for personal income tax.

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Home renovation budget with N26—give your home a new lease on life

If you’ve always dreamed of personalizing your home, then consider setting a long term savings goal for home renovations. At first, the figures might seem daunting, but with proper planning and organization, we’re confident you can reach your target. At N26, we want to help you achieve all your goals, no matter how ambitious. That’s why we created Spaces sub-accounts, where you can organizing your savings alongside your main account. Give your space a unique name like “Dream Kitchen,” set a target to reach, and set money aside automatically with features like Rules and Round-Ups. Pretty soon, you’ll be able to turn your dream home into a reality. 

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