There’s no guarantee your home’s market value will increase by more than the amount you’ve spent on renovations.
We’ve done our homework and pulled together a comprehensive guide from four sources: the Appraisal Institute of Canada’s renovation-value guide, the federal Office of Consumer Affairs’ home-renovation guide, Natural Resources Canada’s energy-efficiency renovation guide, and the Financial Consumer Agency of Canada’s home-insurance guide.
Which Home Improvements Are Most Likely to Increase Value in Canada?
Remember that market value, what a buyer would pay for your home, is separate from the cost to replace it if you had a loss. Improvements might increase market value, replacement cost, both, or neither.
Any project that adds to replacement cost is an insurance discussion, whether it adds to market value or not. You'll likely need more coverage and pay more.
1. Repair Structural, Roof and Building-System Defects
Address leaks, structural issues, unsafe wiring and failing HVAC before spending on updates.
The Appraisal Institute of Canada says roofing, mechanicals, windows, doors, electrical work, and structural repairs help maintain your home’s value. It’s a good idea to review your home insurance policy, especially if you have an older roof, certain kinds of electrical wiring and/or past insurance claims that haven’t been resolved.
Keep receipts, building permits, and inspection reports after repairs are made.
Read More: See Why a Necessary Roof Replacement Should Not Be Delayed
2. Update the Kitchen Without Overbuilding
Kitchen renovations are popular with many buyers. Keep finishes appropriate for the home and the neighbourhood.
Talk to an appraiser or review comparable sales of renovated kitchens in the neighbourhood to determine a budget.
Moving plumbing, removing structural walls, and installing or replacing expensive appliances can change replacement costs and increase risk, so call your insurer before pulling down a wall.
3. Renovate the Bathroom and Control Water Risk
Luxurious bathroom designs are very subjective, but durable materials and functionality benefit everyone.
Before moving on with the remodel, correct any failed waterproofing, damaged grout, leaks, and poor ventilation. Take pictures of plumbing and waterproofing before enclosing them in walls.
Confirm what the insurer covers for construction-related water damage, especially if part of your house is not livable during construction or if you leave your house empty during the remodel.
4. Repaint, Repair Worn Finishes and Declutter
According to the Appraisal Institute of Canada, improvements with broad appeal include redecorating, repainting, and decluttering so buyers get a sense of the home's actual space. None of these improvements affect the home's footprint.
5. Improve Indoor Air Quality and Ventilation Systems
There is no guarantee updating your ventilation will increase resale value or decrease home insurance costs, but it can improve comfort and help to manage moisture.
View the project as a single endeavour that includes both the building envelope and mechanical ventilation. Unbalanced ventilation and insulation projects can lead to condensation problems.
Keep documentation of the design and commissioning.
6. Upgrade Insulation in Walls and Attics
Insulation and air-sealing can make a house more comfortable and help to reduce heat loss.
Savings vary depending on the home, climate, type of heating system, and installation quality. Consider an EnerGuide or other qualified assessment to determine the best places to seal your home.
Tell your insurer if you plan any significant changes to your building envelope. Adding insulation won't necessarily lower your premiums.
Check electrical, moisture, and ventilation before sealing up an assembly.
7. Add Basement Flood-Protection Measures
Mitigation measures may help with insurance pricing or eligibility, though this varies by insurer. Contact your insurer for specifics.
However, reducing risk does not automatically translate into increased value. Improvements may add more value to the property for buyers in an area that is prone to surface water or sewer backups than for others.
Installing a professionally selected backwater valve can reduce water-loss exposure. Ensure the home has a properly functioning sump pump with backup power and/or alarm and proper grading. Check with the municipality about requirements or possible rebates for installations.
Read More: Read the Canadian Guide to Flood-Proofing a House
8. Install Eligible Risk-Reduction Devices
Call the insurer and ask them how much of a discount they provide each year for smoke detectors, water shut-off devices, professionally monitored burglar alarms, carbon monoxide alarms, etc., and what devices qualify for their discount.
Don’t include potential discounts in your budget until you’ve received them in writing.
Pick the devices you’d be happy to maintain if you had to do it without a discount. Think about what happens when Wi-Fi devices don’t have Wi-Fi, battery-powered devices don’t have batteries, and subscription-based devices don’t have subscriptions.
9. Switch to an EV-Ready Electrical Panel
Tell your insurer when you add a battery or an electric vehicle charger, or make significant upgrades to your electrical system. Coverage depends on your insurance policy and the cause of any future loss.
Before upgrading, have a licensed electrician assess your needs, utility requirements, and permitting.
Removing the obstacle to adding an EV, a heat pump, or an induction range down the road might appeal to buyers. But little evidence shows that oversized electrical service adds commensurate value in all markets.
Read More: See How an EV Charger Can Affect Home Insurance
10. Invest in Sustainable Landscaping with Low Maintenance
Fix any drainage issues that direct water towards the home’s foundation before adding decorative plantings.
Adapt to your climate: native plants, shade, erosion control, and easy-to-navigate paths all increase both the beauty and function of a home’s outdoor spaces.
Keep trees and their root systems away from homes and service lines.