Thinking of selling your home in Glendale and wondering whether the improvements you’ve made will help reduce your tax bill? You’re not alone. Many homeowners want to know which upgrades qualify as tax deductions and how these expenses affect their bottom line when it’s time to sell.
Understanding how the IRS views home improvements can make a real difference, especially if you’ve invested in upgrades over the years. Some improvements can increase your cost basis, which ultimately lowers the capital gains tax you may owe when the property sells.
And if navigating tax rules feels overwhelming, there’s always a simpler option. Cash home buyers in Glendale, WI, such as Sell House Fast Milwaukee, offer a straightforward way to sell without worrying about repairs, renovations, or complicated tax calculations. We buy houses as is, and we can help you close in as little as 14 days.
But if you want to know how home improvements impact your taxes, which upgrades qualify, and what you can legally write off, here’s a clear breakdown to help you make informed decisions.
What Are Tax-Deductible Home Improvements?
When it comes to selling your Glendale home, not all upgrades are treated the same. The IRS allows certain improvements—known as capital improvements—to be added to your home’s cost basis. This matters because a higher cost basis lowers the capital gains tax you may owe when you sell.
Capital improvements are upgrades that:
- Add long-term value to the home
- Extend the home’s useful life
- Adapt the home to new uses
They go well beyond simple maintenance or repairs. These improvements must still be in place when you sell and must provide lasting benefit.
Common Examples of Capital Improvements
Here are some upgrades that typically qualify:
- Installing a new roof
- Finishing a basement or adding an extra bedroom
- Upgrading outdated electrical or plumbing systems
- Adding a deck, patio, garage, or sunroom
- Replacing windows with energy-efficient models
- Installing central air conditioning or a new furnace
- Major landscaping that improves structure (e.g., retaining walls, irrigation)
- Adding built-in appliances or permanent fixtures
These improvements directly affect your tax calculation by increasing the cost basis of your home. When you eventually sell, the difference between the sale price and this higher basis becomes smaller, meaning lower taxable gains.
Don’t Forget Your Documentation
Always keep:
- Receipts
- Contractor agreements
- Invoices
- Before-and-after photos
- Warranty records
These documents become extremely valuable during tax preparation or in the event of an audit. Without proof, you may not be able to claim the deduction.
Capital improvements are an important way to reduce your tax burden, so track every major project carefully.
Repairs Vs. Improvements: Know The Difference
When it comes to tax deductions, understanding the difference between repairs and improvements is crucial. Many homeowners assume that any work done on the house counts—but the IRS sees things differently.
What Counts as a Repair?
Repairs are routine tasks that keep your home in working condition. They fix existing issues but do not add long-term value or extend the property’s lifespan. Because of this, repairs cannot be added to your cost basis and are not tax-deductible when you sell.
Common repairs include:
- Patching a leaky pipe
- Repainting interior walls
- Fixing broken windows
- Repairing a damaged gutter
- Replacing worn-out fixtures
These are necessary for upkeep, but they do not qualify as capital improvements.
What Counts as an Improvement?
Improvements, on the other hand, enhance the home in a meaningful and lasting way. They add value, extend usefulness, or improve overall functionality—which is why they reduce your taxable gain when selling.
Examples of improvements:
- Installing new flooring
- Adding a new bathroom
- Upgrading to modern, energy-efficient windows
- Replacing the roof
- Renovating a kitchen
The key question to ask is: Does this project add long-term value or fundamentally improve the home?
If the answer is yes, it likely counts as a deductible improvement.
Understanding this distinction ensures you claim every eligible tax benefit and avoid mistakenly assuming repairs are deductible.
Other Tax-Deductible Upgrades
Not all upgrades directly reduce your capital gains tax when selling, but some qualify for tax credits, which can significantly reduce what you owe in the year the improvement is installed. These credits are often more valuable than deductions because they lower your tax bill dollar for dollar.
Energy-Efficient Upgrades
Energy-efficient improvements don’t increase your cost basis for purposes of reducing capital gains, but they may qualify you for federal energy tax credits. These credits are designed to encourage homeowners to make environmentally friendly upgrades.
Common upgrades eligible for energy-related tax credits include:
- Installing solar panels or solar water heaters
- Adding home insulation that improves energy efficiency
- Replacing old windows with certified energy-efficient models
- Installing high-efficiency HVAC systems or heat pumps
- Upgrading to energy-efficient doors, skylights, or roofing materials
- Adding battery storage systems
These credits can reduce your tax bill immediately the year you install the system, helping offset upfront costs.
While these upgrades don’t directly lower the taxes you pay when selling, they:
- Reduce your ongoing utility costs
- Boost your home’s resale value
- Make your property more attractive to environmentally conscious buyers
If you’ve made any of these improvements, keep receipts and installation documents. They may help you claim valuable tax credits before or during the year you decide to sell your Glendale home.
Landscaping That Adds Value
Landscaping can play a meaningful role in boosting your home’s value—but only certain projects qualify as capital improvements. Routine yard care doesn’t count, but substantial landscaping investments that permanently enhance your property may be added to your cost basis and help reduce your taxable gain when selling.
What Doesn’t Qualify
These maintenance tasks, while important, are not considered improvements:
- Mowing the lawn
- Trimming shrubs or trees
- Seasonal planting
- Basic lawn treatments or cleanups
These tasks preserve your yard’s appearance but don’t permanently increase value.
What May Qualify as Capital Improvements
For landscaping to count as a tax-deductible improvement, it must have long-term impact and add meaningful value to the property. Examples include:
- Installing a new driveway or expanding an existing one
- Building a retaining wall to improve structure or prevent erosion
- Adding a stone patio, walkway, or outdoor living area
- Constructing permanent fencing or decorative hardscaping
- Installing an irrigation system or drainage solution
- Grading the yard for better usability
- Planting long-term landscaping elements, such as trees or hedges that enhance curb appeal
These projects become part of the property and offer lasting benefits, so the IRS generally considers them capital improvements.
Keep Documentation
As with any improvement, keep:
- Receipts
- Contractor invoices
- Landscaping plans
- Permits or project approvals
If the landscaping project permanently enhances your home and adds value, it may help lower the taxes you owe when selling your Glendale property.
Medical-Related Home Improvements
Some home improvements aren’t just upgrades; they’re essential for medical reasons. If you’ve made changes to accommodate a disability or medical condition, these modifications may qualify as medical expense deductions and, in many cases, can also be added to your home’s cost basis.
These improvements must be primarily for medical care and not increase the home’s overall value to qualify as medical deductions. However, many of them still enhance accessibility and safety, which benefits both current living conditions and future resale potential.
Examples of Medical-Related Improvements
Improvements that may be tax-deductible include:
- Installing wheelchair ramps
- Widening doorways or hallways for accessibility
- Adding handrails or grab bars in key areas
- Modifying bathrooms for wheelchair access (roll-in showers, raised toilets)
- Lowering cabinets or countertops for easier reach
- Installing lifts or stair glide systems
- Adding railings, support bars, or non-slip flooring
These upgrades support mobility and safety, making the home more functional for individuals with disabilities or health challenges.
What Makes These Improvements Deductible?
Two key points determine eligibility:
- The upgrade must be primarily for medical purposes (not cosmetic).
- The improvement’s cost may be deducted as a medical expense to the extent it does not increase the property value.
However, if the improvement does increase your home’s value, the added value can be included in your home’s cost basis, helping reduce taxable gains when you sell.
Always Keep Documentation
For medical-related deductions, detailed documentation is essential:
- Doctor’s recommendation (if available)
- Receipts and invoices
- Contractor agreements
- Photos of completed improvements
These records safeguard your deduction and ensure compliance with IRS guidelines.
Medical-related improvements not only make life more accessible; they can also provide financial benefits when it’s time to sell your Glendale home.
Improvements That Don’t Count
While many upgrades can help reduce your tax burden, not everything you do around the house qualifies as a deductible improvement. The IRS draws a clear line between capital improvements (which add long-term value) and routine repairs or maintenance (which simply keep the home in good working condition).
Routine fixes may be necessary before selling your home, but they don’t increase your cost basis and won’t reduce the capital gains tax you may owe.
Common Non-Deductible Expenses
These projects generally do not qualify as tax-deductible improvements:
- Painting interior or exterior walls
- Replacing a broken or worn appliance
- Repairing or cleaning gutters
- Fixing a leaky faucet or patching minor wall damage
- Minor cosmetic touch-ups, like new cabinet handles or light fixtures
- Basic lawn care or seasonal yard maintenance
- Replacing single items that don’t add lasting value (like one cracked tile)
These tasks are considered regular upkeep. They may help your home look better and sell faster, but they won’t reduce your tax bill because they don’t truly extend the home’s lifespan or enhance its long-term value.
Why These Don’t Qualify
These fixes:
- Address immediate issues rather than offer lasting improvement
- Don’t change your home’s function, structure, or square footage
- Have short-term impact and must be repeated over time
For tax purposes, they’re viewed as maintenance, not improvement.
Still, while they aren’t deductible, taking care of repairs can help you present your Glendale home in its best light and potentially attract stronger offers, even if they don’t provide any tax benefits.
Final Thoughts: Make Smart Improvements, or Skip Them Entirely
Understanding which home improvements are tax-deductible can feel complicated at first, but it becomes much easier when you focus on the big picture: track your major upgrades, save every receipt, and lean on a trusted tax professional for guidance tailored to your situation. With the right documentation, you can legitimately reduce your tax burden and keep more profit when selling your Glendale home.
But if the idea of repairs, upgrades, and tax planning feels overwhelming, you don’t have to tackle it all on your own. There’s a simpler, stress-free alternative.
At Sell House Fast Milwaukee, we buy houses in Glendale, WI, in any condition, no cleaning, no fixing, no renovations, and no uncertainty. You can receive a fair cash offer in less than 24 hours and close in as little as two weeks. When you work with experienced cash home buyers in Glendale, WI, you can skip the expense, skip the paperwork, and skip the wait.
If you’re ready for a fast, convenient home sale, reach out today and take the easiest path forward.