Most home improvements are not tax deductible, but a few categories are
The IRS treats most home improvements as capital improvements — work that adds value to your home — and does not let you deduct them from your income in the year you pay for them. You cannot deduct the cost of a new roof, kitchen remodel, or deck on your 2024 tax return, even though you spent real money on them.
However, three narrow categories of home work may be deductible: improvements that are also medical equipment, improvements that are also energy-efficient equipment, and improvements made to rental property or a home office. Each has specific rules about what qualifies and how much you can deduct.
The key distinction is whether the work is a capital improvement (adds value, extends the life of your home, or adapts it to new use) or a repair (restores it to its original condition). The IRS has become stricter about this line in recent years, and the rules vary depending on what the improvement is for.
Key Takeaways
- Medical home improvements — ramps, grab bars, widened doorways, accessible bathrooms — may be deductible if they are medically necessary and do not add value to your home.
- Energy-efficient improvements like heat pumps, solar panels, and certain insulation work may be deductible under the Inflation Reduction Act, with limits that vary by improvement type.
- Home office improvements are deductible only if you use a dedicated room or space exclusively for business, and only the portion of the cost that applies to that space.
- Rental property improvements are deductible over time through depreciation, not as a lump-sum deduction in the year you pay for them.
- The IRS distinguishes between capital improvements (which add value) and repairs (which restore original condition), and only repairs to rental property are when ready deductible.
Medical home improvements and accessibility work
If you install equipment or make structural changes to your home because of a medical condition, you may be able to deduct the cost as a medical expense — but only the portion that exceeds 7.5% of your adjusted gross income (AGI) for 2024. This is a high bar: if your AGI is $60,000, you must spend more than $4,500 on medical expenses before any of them become deductible.
Work that qualifies includes ramps, grab bars, widened doorways, accessible bathrooms, stairlifts, and elevators installed for medical reasons. The IRS will not deduct the full cost if the improvement also adds value to your home — for example, a bathroom renovation that includes accessibility features. In that case, you can deduct only the cost of the accessibility portion, not the renovation itself.
To claim this deduction, you need a letter from your doctor stating that the improvement is medically necessary. You also need to keep receipts and documentation of what you paid. The improvement must be made to your primary residence or a second home you own; you cannot deduct accessibility work on a rental property this way.
Energy-efficient home improvements under the Inflation Reduction Act
The Inflation Reduction Act, which took effect in 2023 and continues through 2024, created tax credits (not deductions) for certain energy-efficient improvements to your primary residence. A tax credit is more valuable than a deduction because it reduces your tax bill dollar-for-dollar, rather than reducing your taxable income.
may have access to improvements include heat pumps (for heating, cooling, or water heating), solar panels, battery storage systems, certain types of insulation and air sealing, heat pump water heaters, and may have access to electric stoves or cooktops. The credit covers 30% of the cost of most of these improvements, up to a total of $3,200 per year for heat pumps, heat pump water heaters, and heat pump clothes dryers combined, and up to $1,200 per year for other improvements like insulation or windows.
These are credits, not deductions, so you claim them on Form 3468 (Investment Credit) or Form 5695 (Residential Energy Credits) when you file your 2024 return. You do not need to itemize deductions to claim them. The rules are complex and the dollar limits vary by improvement type, so check the IRS website or speak with a tax professional about which improvements explore to your situation.
Home office deductions
If you use a dedicated room or space in your home exclusively for business, you can deduct a portion of your home expenses — including improvements to that space. You cannot deduct improvements to a room you use for both personal and business purposes.
You have two methods: the simplified method (which deducts $5 per square foot of home office space, up to 300 square feet, for a maximum of $1,500 per year) and the regular method (which deducts a percentage of your actual home expenses based on the square footage of your office). Improvements like painting, flooring, or built-in shelving in your home office can be deducted under the regular method, but only the portion that applies to the office space.
If you own your home, improvements are deducted over time through depreciation rather than all at once. If you rent, you can deduct improvements you make to your rental space, but you should check your lease first — many landlords do not allow tenants to make permanent changes.
Rental property improvements and depreciation
If you own a rental property, improvements are treated differently than they are for your primary residence. You cannot deduct the full cost of an improvement in the year you pay for it. Instead, you deduct the cost over time through depreciation, which spreads the expense across the useful life of the improvement.
Most residential rental property improvements are depreciated over 27.5 years. This means if you spend $27,500 on a new roof, you deduct $1,000 per year for 27.5 years, rather than $27,500 in year one. The exception is repairs, which restore the property to its original condition and are when ready deductible in the year you pay for them. The line between a repair and an improvement is the source of many IRS disputes.
To claim depreciation, you must file Form 4562 (Depreciation and Amortization) with your tax return. You will also need to track the cost basis of each improvement and the year you made it. If you sell the rental property, you will owe tax on the depreciation you claimed, even if the property did not actually increase in value.
The difference between repairs and improvements
The IRS distinguishes between repairs (which maintain your property in its current condition) and improvements (which add value, extend the life, or adapt the property to a new use). This distinction matters because repairs to rental property are when ready deductible, while improvements must be depreciated.
Repairs include painting, fixing a leak, replacing a broken window, patching a roof, and fixing a furnace. Improvements include replacing an entire roof, adding a room, installing new flooring throughout the house, or upgrading a furnace to a more efficient model. The IRS has become stricter about this line in recent years, and the rules can be counterintuitive — for example, replacing a few roof shingles is a repair, but replacing the entire roof is an improvement, even if you do it for the same reason.
If you own a rental property and are unsure whether work is a repair or an improvement, document what you did and why, keep all receipts, and consider consulting a tax professional. The IRS has published guidance on this topic, but disputes are common.
What you cannot deduct
You cannot deduct improvements to your primary residence, even if they are expensive or necessary. This includes new roofs, kitchens, bathrooms, decks, fences, landscaping, HVAC systems, windows, doors, and siding — unless they also may have access to as medical improvements or energy-efficient improvements under the rules above.
You also cannot deduct improvements to a vacation home or second home, except for medical improvements (if medically necessary) or energy-efficient improvements (if it is your primary residence). Improvements to a home you are selling do not become deductible just because you are selling it.
If you are unsure whether an improvement is deductible, the safest approach is to assume it is not. The burden is on you to prove to the IRS that it qualifies, and the rules are technical.
Frequently Asked Questions
Can I deduct the cost of replacing my roof?
No, not on your primary residence. A new roof is a capital improvement and is not deductible. If you own a rental property, a new roof is depreciated over 27.5 years, not deducted all at once. If the roof is leaking and you patch it rather than replace it, that repair may be when ready deductible on a rental property.
What if I install solar panels on my primary residence?
You can claim a 30% tax credit (not a deduction) for the cost of solar panels under the Inflation Reduction Act. This credit reduces your tax bill dollar-for-dollar and does not require you to itemize deductions. You claim it on Form 5695 when you file your 2024 return.
Can I deduct a home office if I work from home part-time?
Only if you use a dedicated room or space exclusively for business. If you use a bedroom for both sleeping and work, or a corner of your living room, you cannot deduct improvements to that space. The space must be used only for business to may have access to.
Do I have to depreciate rental property improvements, or can I deduct them all at once?
You must depreciate them over time — typically 27.5 years for residential rental property. The exception is repairs, which restore the property to its original condition and are when ready deductible. The IRS distinguishes between the two, and the distinction is often disputed.
What counts as a medical home improvement?
Work that is medically necessary to accommodate a disability or medical condition, such as ramps, grab bars, widened doorways, accessible bathrooms, or stairlifts. You need a letter from your doctor stating the improvement is medically necessary, and you can only deduct the cost if your total medical expenses exceed 7.5% of your adjusted gross income.