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7 Renovation Tax Credits for Home Owners

Hey there, folks! Frank Garay here from The Real Estate Vibe. You know me, I'm always on the lookout for ways to save a buck and make smart decisions about my home. Recently, I got myself an electric car – never thought I'd be an EV guy, but the circumstances just lined up perfectly. And guess what? It came with a sweet $7,500 tax credit!


I also recently wrote an article on how to make use of drought friendly landscaping, and in that article I mentioned that doing this sometimes comes with credits from you local city or county here in California. That got me thinking about tax credits and home improvements, which led me on a search for home improvements that might come with some sort of credit from the Government.


So, I found an article from the National Association of Realtors, and let me tell you, there's some real gold there! Apparently, nearly a quarter of homeowners are planning renovations this year, and some of those projects might be eligible for tax deductions. That could be a huge help in offsetting the costs of keeping your house in tip-top shape.


Now, before we dive in, remember this is just general information. Your best bet is always to consult with a tax professional to see what applies to your specific situation. But with that disclaimer out of the way, let's get to the good stuff!


Greening Up Your Home

Looking for ways to be more energy-efficient and save on those utility bills? The government might just reward you for your eco-conscious efforts. The Energy Efficiency Home Improvement Credit can get you up to $3,200 back for qualified upgrades made after January 1st, 2023. We're talking things like new windows and skylights, biomass stoves, and even a home energy audit – which can not only save you money but also identify potential health and safety issues.


And if you're thinking about going all in on renewable energy, the Residential Clean Energy Credit might be your friend. This credit covers things like solar water heaters and geothermal heat pumps. While there's no dollar limit (except for fuel cell properties), these systems can definitely make a dent in your reliance on traditional utilities.


Preserving the Past, Saving on Taxes

Living in a historic home? You might qualify for the Federal Historic Rehabilitation Tax Credit. This program offers tax breaks for renovations that preserve the historical character of your property. Upgrading pipes, replacing beams, or even fixing the stairs could all be eligible – meaning you can restore your home's beauty while keeping some extra cash in your pocket.


Making Your Home More Accessible

Does your home need some modifications to be more accessible for someone with a disability? These upgrades might be considered medically necessary and qualify for a medical expense deduction. This includes things like lowering kitchen cabinets or installing grab bars in the bathroom. Not only will these improvements make your home safer and more comfortable, but they could also lead to some tax savings.


Working from Home? Take Advantage of the System

For all my fellow home office warriors out there, listen up! You might be able to deduct certain repairs and maintenance costs for your dedicated workspace. Think of stuff like fixing electrical outlets or replacing windows for better insulation. Remember, improvements are generally not deductible, but repairs can be a win-win for functionality and your tax return.


Owning Rental Property? Keep it Up and Keep the Benefits

Landlords, this one's for you! Repairs made to the rental portion of your property can be deducted from your taxable rental income. This includes things like fixing leaky faucets or patching up air leaks. Keeping your rental property in tip-top shape not only benefits your tenants, but it can also save you some money come tax time.


Capital Improvements: Investing in Your Home's Future

While capital improvements typically don't offer immediate tax breaks, they can significantly add value and longevity to your home. Think replacing your aging HVAC system or adding insulation to your attic. These projects might not save you money right away, but they'll help protect your investment and potentially reduce your capital gains taxes down the line.


So there you have it, folks! A whole toolbox full of options to improve your home while potentially saving some money on taxes. Remember, consulting with a tax professional is key to figuring out what applies to you. But with a little research and planning, you can turn your home improvement project into a smart financial move. Happy renovating!

 

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About the Author


Frank Garay is a distinguished figure in the mortgage industry, with a career that began in 1987 and spans several decades of exceptional service. He co-founded the National Real Estate Post in 2009, a video blog that quickly amassed over 250,000 subscribers, becoming a staple for real estate professionals nationwide. In 2010, Frank was honored as one of the Inman 100, marking him as one of the most influential people in real estate.


Frank's expertise has also been showcased on national television, where he has been a featured guest on the Fox News show "After the Bell." His insights on real estate and mortgage trends during these appearances have solidified his reputation as a trusted industry expert.


Currently, Frank leads Mortgage Masters of California, where his deep market knowledge continues to drive success. He also hosts the Loan Officer Breakfast Club, a thriving platform for mortgage originators to connect and learn.


If you have any real estate or mortgage needs, do not hesitate to reach out to Frank Garay. His vast experience and proven leadership make him an invaluable resource for navigating the complexities of the housing market. Connect with Frank for expert guidance and superior mortgage solutions.


Reach out to Frank Garay at 707-695-6313, for your real estate and mortgage needs and experience the difference that expert advice can make.


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