If you’re planning to fix up your home or give it a full makeover, you might be wondering: Can I deduct these expenses on my taxes? The answer isn’t straightforward – it depends on whether the work is considered a repair or a capital improvement, and how you use your property.
In this guide, we’ll break down what qualifies, what doesn’t, and when your remodeling projects could actually save you money at tax time.
Repairs are routine fixes that keep your home in good working order – like patching a roof leak, repainting walls, or replacing a broken window. For your primary residence, these are not tax-deductible. The IRS considers them maintenance, not investments in property value.
Capital improvements, on the other hand, are projects that:
Examples include:
These costs are not deductible in the year you pay them, but they increase your home’s “cost basis.” This matters when you sell your home, because a higher cost basis can lower your taxable capital gain.
📖 Learn more from the IRS: Publication 530 – Tax Information for Homeowners
While most home projects aren’t immediately deductible, there are situations where your work can help at tax time.
1. When You Sell Your Home
If you invest in qualified capital improvements, you can add those costs to your home’s basis. This reduces the gain you report when selling.
For example:
Under the home sale exclusion ($250,000 for single filers, $500,000 for married couples), you may not owe any capital gains tax at all.
2. Energy-Efficient Upgrades
The Energy Efficient Home Improvement Credit lets you claim 30% of the cost of qualifying upgrades – like insulation, new windows, heat pumps, or solar water heaters – up to certain limits.
📝 Check official details on the IRS Energy Credit page.
3. Medical Necessity Improvements
If your improvements are medically necessary—like adding wheelchair ramps, widening doorways, or installing lifts—you might be able to claim them as medical expenses.
To qualify:
4. Home Office Improvements
If you run a business from home and use a dedicated space exclusively for work, you may deduct a portion of repair or improvement costs.
5. Rental Property Repairs
If the property is a rental, repairs are deductible in the year made. Improvements must be depreciated over 27.5 years for residential rentals.
Most home repairs won’t give you a tax break, but major remodels can pay off when you sell your home. Special rules also exist for energy upgrades, medical modifications, home office expenses, and rental properties.
Tip: Keep receipts, contractor invoices, and detailed records for every improvement you make. You’ll thank yourself when it’s time to file taxes or sell your property.
Sky Pro Remodeling is your trusted partner for professional kitchen remodeling, bathroom remodeling, home remodeling, and deck installation in Seattle. Whether you’re looking to improve your current home or prepare for resale, we deliver unmatched results with integrity and craftsmanship.
Let’s build your vision. Call us now or fill out our online contact form to schedule your free in-home estimate.
