Most home improvements are not tax deductible, but a few categories are

The IRS treats most home improvements as capital improvements — you pay for them with after-tax money, and you cannot deduct the cost in the year you pay. The main exception is improvements that are medical in nature and necessary for someone in your household who has a disability or chronic condition. A second, narrower exception covers improvements that increase your home's energy efficiency in specific ways, though these have dollar limits and phase out after 2032. Everything else — a new kitchen, a deck, new windows, a roof — is not deductible, even if you itemize.

The reason is structural: the IRS sees home improvements as adding value to an asset you own. When you eventually sell the house, that added value is reflected in your sale price, and that is where the tax consequence lives (in capital gains, if applicable). You do not get to deduct the cost upfront and then pay tax on the gain later — that would be double-dipping.

Key Takeaways

  • Medical home improvements for a person with a disability — ramps, grab bars, widened doorways, accessible bathrooms — can be deducted as medical expenses if they exceed 7.5% of your adjusted gross income.
  • Energy-efficient improvements like heat pumps, insulation, and certain windows may may have access to for a federal tax credit (not a deduction) of up to $3,200 per year through 2032, with no income limit.
  • Repairs to existing structures are sometimes deductible as maintenance, but the line between repair and improvement is fact-specific and the IRS disputes many claims.
  • Home office improvements are deductible only if you use a dedicated room or space exclusively for business, and only the portion of the improvement that relates to that space.
  • Keeping receipts, contractor invoices, and before-and-after photos is essential because the IRS often asks for proof when home improvement deductions appear on a return.

Medical home improvements: the main deductible category

If you or a dependent in your household has a disability or medical condition, improvements made specifically to accommodate that condition may be deductible as medical expenses. The improvement must be medically necessary — not merely convenient or nice to have — and it must be primarily for the ill or disabled person, not for general household use.

Common examples include: a ramp or lift to replace stairs, grab bars in a bathroom, widening doorways and hallways to accommodate a wheelchair, installing a walk-in shower or accessible bathtub, lowering kitchen cabinets or counters, adding an elevator or stair lift, and modifying a bedroom or bathroom on the ground floor when the person cannot use upper floors. The cost of the improvement itself is deductible, but not the cost of labor or materials that would have been needed anyway (for example, if you replace a regular bathtub with an accessible one, you can deduct the difference in cost, not the entire bathtub).

To claim these, you must itemize on Schedule A and report them as medical and dental expenses. They are deductible only to the extent that your total medical expenses exceed 7.5% of your adjusted gross income (AGI) for 2023. So if your AGI is $60,000, you can deduct medical expenses only above $4,500. You will need a letter from the person's doctor stating that the improvement is medically necessary for their condition.

Energy-efficient home improvements: a tax credit, not a deduction

The Inflation Reduction Act, which took effect in 2023, created a federal tax credit (different from a deduction) for certain energy-efficient improvements. A credit reduces your tax bill dollar-for-dollar, which is more valuable than a deduction. The credit is available through 2032 and has no income limit.

may have access to improvements include: heat pump water heaters, heat pump heating and cooling systems, central air conditioning systems, insulation (walls, attics, basements, crawl spaces), exterior doors, skylights, and certain windows and doors that meet efficiency standards set by the National Fenestration Rating Council. You can claim up to $3,200 per year, with some individual caps (for example, $2,000 for heat pumps, $1,200 for insulation). The improvement must be installed in your primary residence, and you must keep the manufacturer's certification and the contractor's invoice.

This is a credit, not a deduction, so you do not need to itemize. You claim it on Form 5695 and attach it to your tax return. If the credit exceeds your tax liability, you cannot carry it forward to future years (with limited exceptions for certain taxpayers), so the benefit is limited to what you owe in tax.

Repairs versus improvements: a blurry line

The IRS distinguishes between repairs (deductible as maintenance) and improvements (not deductible). A repair restores something to its original condition; an improvement adds value or extends useful life beyond the original. In practice, this line is often unclear, and the IRS disputes many claims.

Replacing a broken window pane is a repair. Replacing all the windows in your house with new, energy-efficient ones is an improvement. Patching a roof leak is a repair. Replacing the entire roof is an improvement. Repainting a room is a repair. Remodeling a kitchen is an improvement. If you are unsure, the safest approach is to treat it as an improvement and not deduct it. If you do claim a repair deduction and the IRS questions it, you will need to show that the work was necessary to restore the property to its prior condition, not to enhance it.

One narrow exception: if you own rental property or use part of your home for business, repairs to those portions may be deductible as business expenses. This requires a separate accounting and is subject to different rules.

Home office improvements: deductible only for the office space

If you use a dedicated room or portion of a room exclusively for business, improvements to that space may be deductible as business expenses. The improvement must be to the office space itself, not to the home as a whole. For example, if you install built-in shelving in a home office, that is deductible. If you upgrade the HVAC system for the entire house, only the portion attributable to the office (by square footage) is deductible.

You must use the space regularly and exclusively for business. If the room is also used for personal purposes — sleeping, entertaining, storage — it does not may have access to. You claim home office deductions on Schedule C (if you are self-employed) or on your employer's form if you are an employee claiming unreimbursed expenses (though employee deductions for home office are not currently allowed under federal tax law).

What you need to keep for the IRS

If you claim any home improvement deduction, keep the original contractor invoice or receipt showing the date, the description of the work, the cost, and the contractor's name and address. If you hired multiple contractors, keep each invoice separately. For medical improvements, keep the doctor's letter stating medical necessity. For energy-efficient improvements, keep the manufacturer's certification of the product's efficiency rating.

Take before-and-after photos if possible. If the IRS asks for substantiation, photos help prove that the work was actually done. Keep these records for at least three years after you file the return, though the IRS can go back longer if it suspects underreporting of income.

Frequently Asked Questions

Can I deduct the cost of a new roof?

No. A new roof is a capital improvement that adds value to your home. You cannot deduct it in the year you pay for it. If you later sell the house, the cost may reduce your capital gain, but that happens at sale time, not when you pay for the roof.

What if I replace old windows with energy-efficient ones?

You may be able to claim a federal tax credit (not a deduction) of up to $600 per window, with a $3,200 annual cap, if the windows meet NFRC efficiency standards. This is a credit, so it reduces your tax bill directly. You will need the manufacturer's certification showing the window's rating.

Can I deduct a bathroom remodel?

Not unless the remodel is medically necessary for someone in your household with a disability. A standard bathroom remodel is a capital improvement. If you add grab bars and an accessible shower specifically for a person with mobility issues, the cost of those modifications may be deductible as medical expenses if your total medical expenses exceed 7.5% of your AGI.

Is a new deck deductible?

No. A deck is a capital improvement that adds value to your home. It is not deductible in the year you build it. If you sell the house later, the deck may increase the sale price, which could affect your capital gains calculation, but you do not get an upfront deduction.

What if I use part of my home for a rental business?

Improvements to the rental portion of your home may be deductible as business expenses, but repairs to the personal portion are not. You must allocate the cost by square footage or by the portion of the home used for rental. Keep separate records for the rental and personal portions, and consult a tax professional because the rules are complex and fact-specific.