The Home Improvement Site

Claiming A Home Improvement Deduction

May 24th, 2007 Subscribe To Our Feed

Spring often encourages homeowners to start considering home improvements and repairs. However, before you get out the hammer and nails or hire a contractor consider if your home improvements may be eligible for a home improvement deduction.

The first thing the homeowner must understand is the difference between home improvements and a home repairs. Simply put, a home repair is classified as fixing a problem. For example, repairing a hole in the roof, fixing a leak or repainting a room would be considered repairs. On the other hand, adding a new room, remodeling a kitchen or bathroom, building a swimming pool or constructing a garage would be classed as improvements. These improvements add to the living amenity of the home’s owners and usually increase the value to the home.

The IRS sets strict guidelines on how a homeowner can claim a home improvement deduction. It is strongly recommended that before you hire a contractor or start any remodeling works that you obtain advice from you tax consultant or from the local office of the IRS

Home improvement deductions can fall into several different categories. A medical condition that required providing disabled access to a home would normally be classed as a home improvement and could be a deduction.

Also, there is a special home improvement deduction for victims of Hurricane Katrina. Consult with the IRS regarding the Katrina Emergency Tax Relief Act as it increases the permitted qualifying home improvement loans.

If you are planning a home improvement to an area of your home that requires some repair you may be able to include the repair as an improvement. The Tax Act states that where a repair is carried out in the same area of the home that is being remodeled then the repair can be included as part of the improvement project. So, if you are planning on remodeling your kitchen don’t forget to take care of the leaking pipes at the same time and claim the entire project as a home improvement deduction.