Is Home Remodeling Tax Deductible? What Taylor, Texas Homeowners Need to Know

Here at Fox Remodeling & Construction, we’ve worked with homeowners all across Taylor, Texas, on projects big and small. One question we often get asked is: Is home remodeling tax deductible? It’s a great question, and while we’re not tax pros, we’ve picked up some info over the years that might help clear things up.

What Kinds of Home Remodels Are Tax Deductible?

Alright, let's get straight to it. Most home remodeling projects aren’t directly tax-deductible. We hate to be the bearers of bad news, but it’s the truth. There are a few situations where a remodel can help you save on taxes down the line—especially when you sell your home. It comes down to knowing the difference between capital improvements and simple repairs.

Here’s a quick rundown:

• Capital Improvements: These are changes that add value to your home or extend its life. Stuff like adding a new room, upgrading the kitchen, or installing energy-efficient windows. Think about bigger, more permanent upgrades.
• Repairs: If you're just fixing things like a busted faucet or patching drywall, these generally don’t qualify for any tax deductions.
• Energy-Efficient Upgrades: Tax credits are still a thing for making energy-efficient improvements—solar panels, better insulation, or new windows to keep that Texas heat out. You might not get a deduction, but you could get a credit.
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TIP: Save Your Receipts

Even if it doesn’t seem like your remodeling project will help with taxes right now, keep your receipts. When you sell your home later, those receipts can be used to adjust your home’s cost basis and potentially reduce any capital gains taxes.

Selling Your Home After Remodeling?

Here’s How a Remodel Could Help

While most remodeling projects aren’t immediately deductible, they might help you out when you sell your home. When you sell, the IRS allows you to increase your home’s “basis,” which means what you’ve invested in the house. So, if you do something like install a new deck or finally get around to that kitchen overhaul, it could reduce your capital gains tax when you sell the house for more than you paid.

And let’s be real, with Taylor growing so fast—especially with new developments springing up on the outskirts—home values here are on the rise. A smart remodel now could mean serious profit later.

Remodeling to Add Value in Taylor

When it comes to remodeling in Taylor, the location of your home can play a big role in its value. Whether you're living near downtown, close to Murphy Park, or in one of the newer subdivisions, each area offers something different to homeowners. If you're in an older neighborhood near Main Street, preserving the charm while modernizing the home can give you the best of both worlds. On the other hand, homes in newer developments near Carlos G. Parker Blvd might benefit from more modern upgrades, like open-concept kitchens or adding outdoor living spaces.

Keep an Eye on Local Events and Growth

Taylor’s been growing, and it’s not just because of the big players like Tesla coming to town. Local events like the Taylor International BBQ Cook-Off bring a lot of attention to the area, which helps drive up home values too. More people moving to Taylor means higher demand for housing, which means remodeling your home now could lead to bigger returns when you’re ready to sell.

Also, if you're planning to remodel, make sure to check out local building regulations and permits. The last thing you want is to start a project and find out you needed a permit for something as simple as adding a deck. We’ve been working with the Taylor Building Department for years, and they’re great at helping homeowners get the permits they need.