If your new home is your primary home the portion of your renovations that are capital improvements will be added to the basis of the home. Renovations that are not capital improvements are considered normal repairs and maintenance and can not be deducted.
In general, a repair is something that you would do to maintain the home at a basic level.
A capital improvement is something that actually adds to the value of the home or increases its usefulness. Some examples of capital improvements are:
- Remodels and room additions (including decks and porches)
- New or upgraded landscaping, irrigation, sprinkler system
- Hardscape such as pavement, block or retaining wall, patio
- Fencing
- Swimming pool, spa
- Storm windows, doors
- New roof
- Central vacuum or security system
- Upgraded wiring, plumbing, ductwork
- Central heating, AC, humidifier
- New furnace, water heater
- Filtration, soft-water, or septic system
- Built-in appliances
- New flooring or wall-to-wall carpeting
- Upgraded insulation
- Satellite dish
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