It is still a great time to sell in the Tulsa real estate market. But even in a seller’s market, you need to get your home in top shape to receive top dollar for it. That may mean making some home improvements first. If the thought of shelling out money for these improvements leaves you a bit cold, keep these things in mind. First, these improvements could increase your chances of finding a buyer quickly. Second, they might be tax-deductible. So, these improvements might not end up costing you as much as you expected.
Tax-Deductible Home Improvements
Capital Improvements
Do you need to replace your roof? Has your air conditioning gone kaput? Thinking of installing storm windows or a home security system? Considering updating the landscaping to create more curb appeal? Need to remodel the bathroom or kitchen? The cost for all of these may be tax-deductible. Capital improvements are any home improvements made that either add value to your home, create a new use, or prolong the life of the property. Minor repairs (fixing a leaky faucet, changing door locks, painting a wall except when part of a larger improvement, etc.) are not considered capital improvements. Therefore, they are not tax-deductible.
Home Office Improvements
In the last year and a half, many companies sent their employees home to work. While home office space became popular a while ago, it is now considered a necessity in many households. Therefore, buyers want to see a dedicated home office space in their Tulsa home. Any upgrades/improvements made to create an office space in your home may also be tax-deductible. Even if you rent a home, you might still receive a tax deduction for improvements made to create a home office. Just make sure you talk it over with your tax advisor before claiming it on your taxes.
Energy-Saving Improvements
Solar panels for residential properties became more popular and more affordable over the past few years. Another reason to consider them? Tax deduction! Geothermal heat pumps, solar water heaters, and even wind turbines are also tax-deductible. Other tax-deductible home improvements include switching to energy-efficient windows, doors, skylights, and upgraded insulation. When you get rid of your old 40 or 50-gallon water heater and replace it with a tankless water heater, receive a tax deduction as well. For more information, please visit the IRS’ energy incentives webpage.
Aging in Place Improvements
As the costs of healthcare skyrocket, many children take in their elderly parents instead of placing them in an assisted living facility. That means making some home improvements to facilitate their specific needs. Installing a zero-transition shower, handrails in the bathroom, opening up the floorplan to allow room for wheelchairs, and even replacing the flooring to avoid tripping hazards all create a livable space for our elderly and others with physical disabilities. Plus, they may widen your buyer pool.
I am not a tax professional. Before filing your taxes, talk to your tax preparer to see which ones are tax-deductible. And always keep your receipts to give to your tax person when you file.
Lori Cain, REALTOR®, Serving Midtown and the greater Tulsa, OK area. Call 918-852-5036.
[…] and bathroom and adding a home office space appeals to today’s homebuyers. I even named possible tax-deductible home projects. While it is great to focus on the positive aspects, you also need to know which home improvement […]