Home improvements can be a smart investment—boosting your property’s value, enhancing comfort, and even lowering utility bills. But when tax season rolls around, many homeowners ask the same question: Which improvements can I deduct on my taxes?
In 2024, the IRS rules around home improvements remain clear—most upgrades are not directly deductible in the year you spend the money. However, some improvements qualify for tax credits, deductions, or can increase your cost basis, reducing your taxable gain when you sell your home.
This guide breaks down what qualifies, what doesn’t, and how to make the most of your home-related tax benefits.
✅ Home Improvements That May Be Tax Deductible or Eligible for Credits in 2024
1. Energy-Efficient Upgrades
The Inflation Reduction Act expanded tax credits for energy-efficient improvements. For 2024, homeowners may qualify for credits of up to 30% of the cost for:
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Solar panels and solar water heaters
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Energy-efficient windows, doors, and skylights
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Insulation upgrades
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Efficient HVAC systems, heat pumps, and water heaters
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Electric panel upgrades and home energy audits
These are claimed under the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit.
2. Home Office Improvements
For those who are self-employed or operate a business from their residence, specific upgrades made to the home office can qualify for tax deductions. This can include:
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Repairs or improvements directly related to the office (painting, flooring, lighting)
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A portion of whole-home improvements (new roof, HVAC system) based on office square footage
Note: Regular employees working remotely usually cannot claim this deduction.
3. Medical-Related Home Improvements
If you make improvements for medical reasons, they may qualify as a medical expense deduction. Examples include:
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Installing wheelchair ramps
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Widening doorways for accessibility
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Adding stair lifts or handrails
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Modifying bathrooms for safety
For eligibility, the upgrades must serve a genuine medical need rather than simply offering added comfort or convenience.
4. Rental Property Improvements
If you own a rental property, improvements are generally not immediately deductible but can be depreciated over time. Eligible improvements include:
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Kitchen or bathroom remodels
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New flooring or roofing
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HVAC upgrades
These costs reduce your taxable rental income through depreciation deductions.
5. Capital Improvements That Raise Your Home’s Cost Basis
Even if an improvement isn’t deductible now, it may save you taxes when you sell. Improvements that add value, prolong the home’s life, or adapt it for new use get added to your property’s cost basis.
Examples:
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Room additions
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New roof
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Major landscaping projects
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Permanent upgrades like plumbing or electrical systems
When you sell, a higher cost basis means lower taxable capital gains.
🚫 Home Improvements That Are Not Tax Deductible
Not every upgrade qualifies. These are considered personal expenses and are not deductible:
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Cosmetic upgrades (painting, decorating, new furniture)
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Routine maintenance (fixing leaks, cleaning gutters, replacing broken windows)
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Luxury improvements without medical or energy benefits (swimming pools, hot tubs)
📌 Key Tips to Maximize Your Tax Benefits
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Maintain thorough documentation—hold on to invoices, agreements, and payment confirmations.
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Differentiate between repairs vs. improvements – Repairs usually aren’t deductible, but improvements can add to your cost basis.
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Use IRS Form 5695 – For claiming energy-efficient home improvement credits.
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Consult a tax professional – Rules change often, and personalized advice can maximize savings.
🏡 Final Thoughts
In 2024, most home improvements won’t directly reduce your tax bill. However, energy-efficient upgrades, medical-related modifications, and certain home office improvements may qualify for deductions or credits. Even if your project isn’t deductible right away, keep records—capital improvements can pay off when you eventually sell your home.
Smart planning ensures your home upgrades not only enhance comfort and boost value but may also reduce your overall tax liability.
