You want a bigger better home every time but the expenses are just mounting, hey wait, the government plans to give you some relief in the form of home improvement.
Never cross the line between home improvement and repair. Both are different.
So, what is home improvement? This would include adding a fence, driveway, new room, swimming pool, garage, porch or deck, insulation, new heating/cooling systems, a new roof or landscaping. A capital expense, wherein you would be spending it once in a lifetime.
Now let’s consider home repair. Home repair is decidedly different from home improvement. It is something you do to arrest the decay of your property. You are spending to keep a check on the damage that has been done. A pure damage control
What constitutes home repair? Repainting, any sort of fixing, repairing leaks, and replacing broken fixtures constitute home repairs. But there is also a way to bend the rules, that is show your house as home improvement. So try repairing a few things when you are trying to add a few things to your house.
A drop in home rates should be the ideal time to improve homes, as you get the best of rates at the lowest costs. If you do so, then you can deduct these expenses over the life of the loan and helps in saving a lot.
On the other hand, if you use only a portion of the loan you have taken, then the deduction is proportional. The remainder is deducted over the life of the mortgage. You must also remember that points which are not deducted by the year the loan is paid off are usually cent percent deductible in the payoff year.
So, the next time, you are all ready to add a few things to your house and it could go a long way. A good home is a beautiful home.
Find more about Tax Deductions