Question

I have a question about home renovation tax credit? Can I deduct the money I spent remodeling my home using home improvement tax deductions?

Answer

 

No, you cannot deduct the expense of home improvement using a home renovation tax credit. However, home improvement tax deductions are available for making your home more energy efficient or making use of renewable energy resources such as solar panels.

If the home renovation is a home improvement, you can add the cost of the improvement to the basis of your home. By adding the cost of improvement to your basis, the gain on your property will decrease when you sell it.

You must keep records of any improvements made to your property. If the cost is a repair, you can’t deduct it nor add it to the basis of your home.

Improvements to your property include:

  • Add to its value
  • Prolong its useful life
  • Adapt it to new use

Improvements include:

  • Putting a recreation room in your unfinished basement
  • Adding another bathroom or bedroom
  • Putting up a fence
  • Putting in new plumbing or wiring
  • Installing a new roof
  • Paving your driveway

A repair keeps your home operating efficiently. It doesn’t add to the value of your home or prolong its life.

Repairs include:

  • Repainting your home inside or outside
  • Fixing your gutters or floors
  • Fixing leaks or plastering
  • Replacing broken window panes

Related Topics

Related Resources

Tax Deductions For Home Purchase

Get more from your tax return and learn what tax deductions are available for home purchases with help from the tax experts at H&R Block.

Online Tax Return – Filing Your Tax Return Online

Interested in filing your tax return online? Start here for online tax return tips and what you need to know about filing taxes online from H&R Block.

Deduct Health Insurance Premiums

Learn more about deducting health insurance premiums with tips from the tax experts at H&R Block.

Can I Deduct Health Insurance Premiums?

Can you deduct health insurance premiums if you were self-employed? Learn more from the tax experts at H&R Block.