7 Home Renovations That May Qualify for Tax Deductions, From Plumbing Upgrades to Electrical Improvements

We may earn revenue from the products available on this page and participate in affiliate programs.

Domino Reno: Before + Afters, DIYs, and Advice From the Pros

Subscribe now to get our newsletter in your inbox.

If you invested in home renovations last year and vowed to stay ahead of tax season this time around, consider this your motivation: valuable deductions may be hiding in plain sight. Specialized upgrades—from rewiring a home office to installing accessibility grab bars in the bathroom—as well as broadly beneficial improvements like a professional home-energy audit all appear on the list of projects that could qualify for government-backed tax savings.

Still weighing whether to take the plunge on a renovation? Think of it as an investment in both your finances and your everyday comfort. A recent report from home insurance group Hippo found that one-third of homeowners regretted postponing maintenance or upgrades. Below, we spotlight seven categories of home improvements—from installing new windows to upgrading aging pipes in a historic residence—that could deliver meaningful financial returns.

If you completed energy-efficient upgrades—whether structural enhancements or the installation of modern mechanical systems—after January 1, 2023, you may be eligible for the Energy Efficiency Home Improvement Credit worth up to $3,200. Here are several project categories worth reviewing against your records.

The work-from-home lifestyle comes with meaningful perks—among them, the potential to deduct home office repair expenses (note that capital improvements are treated differently). If your dedicated workspace required maintenance last year, such as replacing faulty outlets and wiring or upgrading to dual- or triple-pane windows, it's worth investigating what qualifies as tax deductible. You may also be able to deduct the cost of maintaining and monitoring a home-security system if it serves your business operations. The key consideration is whether the project affects the entire residence or solely the office area.

The Residential Clean Energy Credit could apply to your tax return if you installed qualifying renewable energy systems at your residence. With limited exceptions, there is no dollar cap on this credit. Solar panels are the most widely recognized eligible product, but several other systems also qualify, including solar water heaters, geothermal heat pumps, and battery storage technology designed to provide backup power during outages.

Historic residences often demand considerable upkeep, yet preserving original architectural character makes every effort worthwhile. These improvements may also qualify for the Federal Historic Rehabilitation Tax Credit. If you've undertaken projects such as upgrading aging plumbing to meet current building codes, replacing structural posts or beams with visually consistent materials, or installing a new staircase that echoes the original craftsmanship, it's well worth reviewing what qualifies.

You may qualify for deductions on home modifications that accommodate a disability or support aging in place—for yourself, your spouse, dependents, or other household residents—as part of your medical expense deduction. The deductible amount depends on how the improvement affects your property's overall value, making it important to review the specific guidelines carefully.

Adjusting kitchen cabinetry to a lower height, installing pull-down shelving, or adding grab bars in the bathroom may all qualify, as can installing modified smoke detectors and smart monitoring systems such as water leak detectors. You might even be able to deduct the cost of grading or leveling outdoor pathways to improve accessibility around your residence.

If you rent out a portion or the entirety of your home, repair expenses may be deductible against your taxable rental income. Certain limitations apply, but addressing bathroom leaks, replacing compromised insulation, and installing weather stripping around doors and windows may all qualify as deductible repairs.

Capital improvements are distinct from routine repairs in that they typically increase a property's value, though the return on investment may be realized over a longer timeframe—often when the home is sold. There are also specific limitations on which improvements qualify for tax deductions. Upgrading to a new HVAC system to replace one over a decade old, installing a water softener, or adding insulation to an attic are all investments that can deliver financial benefits over time.

Samantha Weiss-Hills is the managing editor for Domino. She edits and writes home tours and features, and she's the friend who everyone texts for glassware, sofa, and sheet recommendations. She lives in Brooklyn with her husband, Alex, and their beagle-corgi, Elsa.

Learn more about Domino.comEditorial Standards