If you use your home solely as your personal residence, you can't deduct the cost of home improvements. These costs are non-deductible personal expenses. In general, home repairs are not tax-deductible. However, there are some exceptions.
Repairs made after a natural disaster, repairs to a rental property, and repairs to a home office may also qualify for tax deductions. If the primary purpose of a home improvement is to help provide health care for you, your dependent, or your spouse, you can include it as a medical expense in your taxes. While making repairs to a property may seem like a capital improvement for the homeowner who invested time and money in them, they won't necessarily count as capital improvements to the IRS. If the value of your property doesn't increase because of the improvement, you can count the total cost of home improvement as a medical expense.
Some home improvements are tax-deductible only in the year the home is sold, so be sure to keep all receipts and documentation. If you make the improvements with your home equity line of credit (HELOC), then the interest you accrue on the loan may be tax-deductible if it qualifies for the breakdown, explains Eric J. The cost of installing entry or exit ramps, modifying bathrooms, lowering cabinets, widening doors and hallways, and adding handrails, among others are home improvements that can be deducted as medical expenses. Other common examples of home improvements include a new roof, a new driveway, a new septic system, or new appliances.
Home improvements can also be deducted from your income as medical expenses if they are medically necessary. That said, if you made substantial improvements to your home to help a person with a physical disability, spouse, or dependent, or installed special equipment, those costs could be considered medical expenses. However, it's first important to understand what types of improvements qualify as capital improvements. In addition, any amount spent on these improvements that increase the value of your home cannot be claimed as a medical expense. A full list of home improvements that qualify for the medical deduction can be found on the IRS website.
If your home improvements meet certain energy efficiency standards, you may qualify for the energy efficient residential property credit. Mark Steber, director of tax information for tax preparation company Jackson Hewitt, told The Balance in an email that home repairs such as fixing gutters or painting a room are considered general maintenance rather than capital improvements. These include tax deductions and tax credits for renovations and improvements made to your home either at the time of purchase or later. For tax purposes, a home improvement includes any work done that substantially increases the value of your home increases its useful life or adapts it to new uses.