It’s no secret that few people enjoy doing their taxes. But if you’re a homeowner who has recently taken out a home improvement or interior remodeling loan, you might want to read this article. This post tackles the topic of taxes and home improvement, and whether your home improvement loan is tax-deductible.
Do I Qualify for a Tax Deduction?
Unfortunately, you can’t deduct the actual amount you’ve spent on your home improvement projects from your taxes. The good news is the interest you’ve incurred from the home improvement loan you took out is tax-deductible. Before going further into the discussion, it should be noted that it’s best to consult a qualified tax adviser. This is to make sure that your property is eligible before taking out a home improvement loan.
The Conditions & Requirements
Two conditions must be met before you can claim a tax deduction.
-
-
The home improvement loan must be secured by your primary residence.
-
-
The proceeds must be used to “substantially improve” the property that’s securing the loan.
The first condition means that you must be the owner of the home and you must be living in it. Additionally, you must be the borrower and the loan has to be secured by the property you’re taking out the loan for. The second condition means that you must be able to show that the loan was used for home improvement.
Which Home Improvement Projects Qualify?
To be able to meet the second requirement, the project you’ll be doing must add value to your home. These projects include but are not limited to:
-
-
Room additions
-
-
-
Roof replacement
-
-
Kitchen or bathroom remodeling
DreamMaker Bath & Kitchen can guarantee that our services will indeed add value to your home. Find your location to schedule an appointment to discuss your next project.
