Deducting repairs or improvements to your home

March 11, 2008

Generally speaking, you cannot deduct the cost of improvements or the cost of repairs you’ve made to your principal residence. (However, improvements to your home for necessary medical care may be deducted as a medical expense, if all requirements are met.) Although the improvements cannot be deducted, they do increase the basis of your home.

Home improvements add to the value of your home, prolong its useful life, or adapt it to new uses. Examples of improvements include the following:

  • Paving a driveway
  • Paneling a den
  • Putting up a fence
  • Adding a bathroom

You should add the cost of improvements to the basis of your property. Your initial basis is usually the cost of your property (what you paid for it originally). Improvements increase your basis. If you sell your home in the future, improvements could lower your tax bite because any gain realized is reduced by additions to the basis of your property.

Repairs are different from improvements; repairs keep your home in good operating condition. They do not materially add to its value or substantially prolong its life, and you do not add their cost to the basis of your property. Examples of repairs include the following:

  • Repainting your house (inside or out)
  • Fixing your gutters
  • Replacing a roof
  • Replacing broken window panes

You should note that in most cases we don’t pay taxes on the profits of the sale of your personal residence (see our prior blog post about Selling your Home), but if you have a home office or convert your residence to a rental property, you will want to have the records of home improvements.

Donna Bordeaux is a Certified Public Accountant and Personal Financial Specialist with Calculated Moves, CPAs, PA in Lake Wylie, SC (a suburb of Charlotte, NC).  For further information about Donna or her firm, please visit

Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.