Are Home Improvements Tax Deductible?

05th Mar 2016 Blog, Panamloans, Tax Deductible, Taxes

11477985596_c784fd104cTax season is lurking right around the corner. As April approaches, many homeowners are wondering if their 2015 home improvements are tax deductible. The answer, however, is not so easy.

“Major home improvements are tax deductible,” says Balram Kakkar, a New York attorney and Real Estate Professional, “but only after you have sold your home.” So while you may not be able to claim these deductions this year, Kakkar suggests you keep track of all improvements for the day you decide to sell.

But are you able to deduct all home improvements? According to the IRS, a tax-acceptable improvement is defined as one that adds value to your home, “considerably” prolongs your home’s useful life, or adapts your house to new uses.

What improvements fall into this category? Examples, according to Kakkar, include new plumbing or wiring, or adding a bathroom. So while you can write off that first floor half bath, your new patio and swimming pool set-up likely won’t count.

“If the work done on the home is purely for maintenance, the cost cannot be deducted and generally cannot be added to the basis, or value, of your home,” explains Kakkar.

photo credit: House/Home Inspection via photopin (license)