Home ImprovementAre Home Improvements Tax Deductible in 2025?
While most personal home improvements don’t qualify as tax deductions, certain upgrades and repairs can lower your tax liability or boost your property’s long-term tax benefits.
Whether you’re a homeowner, landlord, or remote worker, here’s a detailed guide on which home improvements are tax deductible in 2025—and how to take advantage of them.
📊 Comparison Table: What Home Improvements Are Deductible?
| Improvement Type | Deductible in 2025? | How to Claim or Benefit |
|---|---|---|
| Solar Panels | ✅ Yes | Form 5695 (Clean Energy Credit, up to 30%) |
| Energy-Efficient Windows | ✅ Yes | Form 5695, max limits apply |
| Home Office Remodel | ✅ Partial | Schedule A or C (must be exclusive workspace) |
| Medical Accessibility Upgrades | ✅ Yes | Deductible as medical expense (7.5% AGI rule) |
| Kitchen/Bathroom Remodel | ❌ Usually No | Only adds to basis for capital gains exclusion |
| Historic Home Restoration | ✅ With restrictions | May qualify for federal/state tax credits |
| Rental Property Improvements | ✅ Yes (depreciated) | Use depreciation over time on Schedule E |
| Landscaping | ❌ Generally No | Allowed for rental property depreciation only |
| Disaster Repairs | ✅ Sometimes | Only if federally declared disaster area |
🌟 1. Clean Energy Home Improvements
Deductible? Yes
Installations such as solar panels, solar water heaters, energy-efficient windows, insulation, and geothermal systems can earn you up to 30% back in federal tax credits via Form 5695.
Pro Tip: There are annual limits for certain systems like windows, so check current IRS guidelines.
🏠 2. Home Office Improvements
Deductible? Partial (if qualified)
You may claim a portion of home renovation costs if:
- The workspace is used exclusively and regularly for business
- You are self-employed or a business owner (not W-2 remote workers)
Use either:
- Actual Expense Method: Percentage of home used for office
- Simplified Method: $5/sq ft up to 300 sq ft
3. Medical-Related Home Improvements
Deductible? Yes (if medically necessary)
Modifications made to accommodate medical conditions can be deducted if they exceed 7.5% of your Adjusted Gross Income (AGI).
Examples:
- Installing ramps or elevators
- Widening doorways
- Lowering countertops
Must be prescribed by a doctor and for a specific medical purpose.
4. Historic Home Improvements
Deductible? With restrictions
You may qualify for historic preservation tax credits if:
- Your home is registered as a historic property
- Renovations follow preservation standards
Check with your State Historic Preservation Office (SHPO).
5. Capital Improvements (Boost Basis)
Deductible? Not directly, but helps with future taxes
Capital improvements add to your home’s cost basis (purchase price + improvements). When you sell your home, a higher basis = lower taxable gain.
Qualifying upgrades:
- New roof
- Room additions
- Major system upgrades (HVAC, plumbing)
Note: Keep detailed records of all invoices and receipts.
6. Landlord/Rental Property Improvements
Deductible? Yes (depreciated over time)
Landlords can deduct home improvement costs through depreciation, usually over 27.5 years for residential properties.
Examples:
- New appliances
- Flooring upgrades
- Roof or HVAC replacement
Use Schedule E and consult a CPA for depreciation timelines.
7. Disaster Repairs
Deductible? Sometimes
If your home was damaged in a federally declared disaster, unreimbursed repair costs may be deductible.
- Claimed via Form 4684 (Casualty and Theft Losses)
- Requires itemized deductions and documentation
8. Landscaping & Curb Appeal
Deductible? Not for personal use
Landscaping typically isn’t tax-deductible unless:
- It’s part of a capital improvement for future sale value
- It’s on a rental property and depreciated
FAQ: Home Improvement Tax Deductions 2025
Q: What home improvements are tax deductible in 2025?
A: Clean energy upgrades, home office renovations (if qualified), medical accessibility changes, and rental property improvements.
Q: Are kitchen or bathroom remodels tax deductible?
A: Not directly, but they may increase your home’s cost basis to reduce future capital gains.
Q: Can I deduct a new roof in 2025?
A: Only as a capital improvement (not immediately deductible), or depreciated if it’s a rental property.
Q: What form do I use for energy tax credits?
A: IRS Form 5695 for Residential Energy Credits.
Q: Are landscaping costs deductible?
A: Only for rental properties or when part of a capital improvement.
Final Tips for Claiming Home Improvement Deductions
- Save all receipts and before/after photos
- Consult a tax professional before filing
- Use the correct IRS forms (Schedule A, Form 5695, Form 4684, etc.)
- Keep a renovation journal for capital improvements (dates, costs, scope)
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