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Is My New Roof Tax Deductible?

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Is My New Roof Tax Deductible?

Taking care of your home is very important. To ensure your home stays in good overall condition, there are some major improvements and repairs that will need to be made from time to time. One of the biggest improvements that you will likely have to make if you are in your home for 25 years or more is the full replacement of your roof. While a roof can be a very expensive item to replace, there are some tax benefits that come with installing a new roof.

What is a Capital Improvement?

When you have a new roof installed in your home it can be considered a capital improvement from a tax perspective. Capital improvements are defined as any investment or major repair that you make that will go to either improve the value or extend the useful life of the home. Any capital improvements you make to your home can be added to the tax basis of your property when you go to sell it. This essentially makes capital improvements deductible against any capital gains you incur if you sell your home for a profit.

How are Routine Maintenance and Repairs Different?

Capital improvements are specifically differentiated from routine maintenance and repairs in the tax code. Repairs and maintenance, on the other hand, are considered recurring costs and are not deductible or available for any tax benefit when you sell.

Keeping Records for Capital Improvements

If you are looking to deduct the cost of a new roof, or any other capital improvements, it is important that you keep proper records of your expenses. In some cases, this may mean holding on to receipts and invoices for decades before you go to sell your home. Some other common capital improvements that can be used to reduce your tax bill can include improving your kitchen, adding a swimming pool, or upgrading the mechanicals or electrical systems in your home.

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