Home improvement is the repair, maintenance or improvement of residential real property. This includes, but is not limited to, structures, fixtures, and finishes like flooring, cabinetry, plumbing, electrical systems, and landscapes. This is also referred to as “remodeling” or “redecorating”.
With rock-bottom interest rates, now is a great time for homeowners to invest in home improvements. The most popular projects are focused on making the home energy-efficient (caulking and weather stripping around doors and windows, replacing old HVAC systems), smarter (adding a thermostat, or installing a doorbell) and more aesthetic (painting, adding trim to windows, or sprucing up the front yard).
Many home improvement contractors will work with you on the financing for your project. A common way to obtain funds is through a home equity loan which allows you to borrow against the value of your house. These loans are repaid over 5-30 years via fixed monthly payments. Be sure to consider the total costs of the project including any fees charged by your lender.
Typically, the material cost of your project is tax-exempt if you have documentation that it meets the state’s definition of a capital improvement. Each state has its own requirements for what can be considered a capital improvement and you should contact your local tax office to determine the specifics. For example, in New York, you must get a “Certificate of Capital Home Improvement” which can be obtained by completing a form that is available at your county’s department of taxation and finance.