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Are home improvement costs tax-deductible?

Question by greggpichler: Are home improvement costs tax-deductible?

Best answer:

Answer by JeffyB
It depends on where you live, and the type of improvement. The most common improvement that is tax deductible is energy improvements — such as more insulation.

Know better? Leave your own answer in the comments!

4 comments

  1. My tax agent told me last year that the only things that are tax deductable are those items to improve on “green” or home remodeling costs after you sell the house. Also, go to irs.gov for more info.

  2. No, but keep the receipts. If you owe any tax when you sell the property, then the cost of improvements (not of repairs) can be added to the amount you can take off of the sale price before you figure your tax on the sale.

    The exception here is the Residential Energy credit – if you made improvements that fit that requirement, such as eligible windows, you might be able to take a credit for that year for part of the cost.

  3. hottotrot1_usa

    Generally, no. But they may add to your “cost basis” in the house, so that when you sell it, your capital gains are reduced.

  4. Tax-favored home improvements range from replacing windows and doors, to adding insulation or special roofing material, to converting heating and cooling systems to solar power.

    The best thing about these tax breaks is that they are credits, which reduce IRS bills dollar for dollar. And while some credits are phased out once a taxpayer earns a certain amount, these credits are available to any homeowner, regardless of income.

    You can include as medical expenses amounts you pay for special equipment installed in a home or for home improvements when the main purpose is medical care for you or your spouse. You can then deduct these amounts as long as you follow your doctor’s orders and the IRS’s rules. When claiming medical deductions, both the medically necessary home improvements as well as the more run-of-the-mill health care costs must be itemized on Schedule A. And only the amount that exceeds 7.5 percent of your adjusted gross income is deductible.

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