Homeowners are responsible for keeping their properties up-to-date. From time to time, that responsibility calls for making improvements. The IRS encourages homeowners to do so by providing the opportunity for tax deductions on certain types of improvements.

While some home improvements qualify for tax deductions, others are eligible for tax credits.

What Home Improvements Are Tax-Deductible in 2024?

In the most general sense, a tax-deductible home improvement is a major renovation that adds value to your home.

These projects involve making a permanent enhancement, upgrade, or modernization that drives up the property’s cost basis and market value, which is why they’re called “capital improvements.” If you eventually sell your home, such renovations can raise profits from the sale.

Improvements to your home’s energy efficiency are usually eligible for tax credits, meaning your tax bill will be lower rather than your taxable income.

Typically, tax credits yield more savings than deductions. Homeowners therefore have more incentive to invest in energy-efficient equipment and retrofit their homes. The credit a homeowner receives reflects a percentage of the cost of a “qualified property.”

Some of the energy-efficient home improvement projects that may qualify for tax credits include:

  • Solar panel or water heater installation
  • Energy-efficient windows, doors, and insulation
  • Electric vehicle charging stations
  • Energy-efficient HVAC systems

The differences between tax-deductible improvements and those eligible for tax credits come down to the scope of the work and the value the improvements add. Tax deductions, which reduce your overall taxable income and exposure, are generally reserved for home improvements that permanently increase your property value.

By contrast, expenses that qualify for tax credits are usually related to keeping your home up-to-date, especially in terms of energy efficiency. These can include solar panels, insulation, and HVAC installation or upgrades. Consult a professional to learn more about tax credit limits and allowances.

What Makes An Energy-Efficient House?

If you are thinking of making an old building more energy-efficient or just want to know more about what to look for in a new building or property, these are the essential or important elements you should be take note of:

  • Energy-Efficient Certificate
    • Ideally, the EPC score should be band D or higher.
  • Renewable Energy Sources
    • This energy is the energy generated from natural sources like solar power, renewable electricity supply, wind energy, air source, heat pumps, biomass heating systems, solar heating, and hydroelectric systems.
  • Modern Double Glazing Or Secondary Glazing
    • Single glazed windows and doors are not really good insulators.  This means really high energy bills.  Having your windows and doors double-glazed can offer really high energy savings  Secondary glazing, on the other hand, is the best option for upgrading inefficient old windows for those living in buildings or areas where double glazing installation is not allowed.
  • High Performance Cladding
    • Giving your home additional cladding is similar to putting an extra skin on the outside of it.  Since much of the heat inside escapes through the walls, quality cladding may just be what the home needs to stay warmer longer.
  • An Insulating Front Door
    • Homeowners usually neglect front doors.  Front doors need to be given more attention because they form a barrier between the home and the weather and other elements.  an insulated front door will work wonders in making your home more energy-efficient.

Other factors you may also consider are the following:

  • cavity wall insulation
  • solid wall insulation
  • loft insulation
  • draught insulation
  • update your boiler
  • programmable or smart thermostats
  • energy-efficient appliances
  • using LED bulbs in place of old bulbs

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***FUN FACT ***

Brooklyn has the longest-standing public library system in all of New York City.  Home to 59 libraries, The Brooklyn Library system was founded in 1892, before the New York Public library (1895) and The Queens Public Library (1896).