Improvements that increase tax basis

Improvements that increase tax basis

  • Faber Real Estate Team
  • 03/11/22

Improvements that Increase your Tax Basis

Curious what items you can use to decrease your tax basis when you sell?  Is the property an investment? You can deduct annually.  We are not tax advisors, so you will need to verify with your tax consultant but this list should get you going in the meantime. Below is a list of itens some you may know and some that may suprise you. 

Examples of Improvements that Increase your Basis

Additions: bedroom, bathroom, deck , garage, porch, patio

Lawn & Grounds: landscaping, driveway, walkway, fence, retaining wall, swimming pool

Exterior: storm windows/doors, new roof, new siding, satellite dish

Insulation: attic, walls, floors, pipes and duct work

Systems: heating systems, central air conditioning, furnace, duct work, central humidifier, central vacuum, air/water filtration systems, wiring, security system, lawn system

Plumbing: septic system, water heater, soft water system, filtration system

Interior: built-in appliances, kitchen modernization, flooring. wall-to-wall carpeting, fireplace 


There are many other improvements that qualify that are not listed but this should give you a good idea of what qualifies.

Keep your records

In order to deduct the cost of home improvements, you need to keep record of your improvements. Make sure to create a system for storing your receipts and invoices. 


Stay Organized

Whether you like pen and paper, Word document, or Excel spreadhseets, create a system that works for you and is easy to use. We recommend using a Spreadsheet and prefer to utilize Google Workspace for Sheets so we can easily collaborate with others involved in the property. 


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