Home improvement is a broad term used to describe any upgrade or renovation of a house, such as changing the color of one’s living room, adding new windows, or upgrading the heating and cooling system. Some home improvements are done to increase a home’s value, while others are done for personal comfort or convenience. Still other projects can yield significant tax savings. A homeowner should carefully consider any home improvement project before beginning work.
It’s easy to get carried away with a home improvement project and end up spending more than you should. To keep costs under control, establish a budget before you start working. This should include an initial down payment and subsequent incremental payments until the work is completed and all inspections, certificates of occupancy and other requirements have been met. Also, avoid overspending by avoiding choosing materials that are too expensive and never relying solely on price when selecting contractors for the work. Contractors vary widely in their quality of work and ability to complete a job on time.
A well-planned and executed home improvement project can add beauty, comfort and value to a residence. It can also reduce energy costs and improve the safety of a house. However, many homeowners make mistakes that result in a costly renovation that does little to enhance their property’s value or increase their chances of selling it.
Many of these misguided home improvements involve splurging on items that most buyers won’t want, such as high-end appliances or a luxurious master suite. It’s important to talk with a real estate agent before beginning any project to learn which upgrades will actually increase your home’s resale value.
The home improvement industry has exploded in recent years. In part, this is due to rock-bottom interest rates, which have made homeowner debt seem attractive and affordable. In addition, TV shows such as HGTV’s Fixer Upper and This Old House have helped to promote the notion that home improvement can be both fun and rewarding.
Some of the more popular home improvement projects include installing a new front door, replacing old windows and putting in a deck. Replacing old and leaky roof shingles, repairing damaged gutters and painting the exterior of a house are also common improvements. Adding a flower garden and removing overgrown shrubs and trees can also boost a home’s curb appeal.
Homeowners should carefully weigh the costs and benefits of any home improvement project. Certain improvements, such as energy-saving home improvements, may qualify for a federal income tax credit. Homeowners should also consult with a Certified Public Accountant to determine whether the labor and other costs of specific home improvements are taxable. In general, only capital improvements that substantially add to the value of a home, prolong its useful life or adapt it to new uses are tax deductible. Repairs, on the other hand, do not add to a home’s cost basis and cannot be subtracted from its sales price when it is sold.