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Are there tax benefits for conducting upgrades to my home? The house I'm getting doesn't come w/ appliances, will appliances count as an upgrade? What about fencing the backyard or installing a b-ball court?
There are no tax benefits for upgrading your home, except that any cost of permanent improvements, such as fencing in the backyard r a b-ball court, will add to the basis of the house so that if you later sell it at a gain, the gain will be that much less.
Also, if the cost of the upgrading is financed with your home mortgage, the interest is deductible.
Some of those items, e.g. appliances, will immediately begin depreciating. If you add them to your mortgage that may increase your property tax basis.
Although you deduct mortgage interest and taxes, , the property taxes often go up.So in 10 years you may need new appliances but you will still be paying higher property taxes because you financed the old ones on your mortgage.
Just something to think about.
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