TaxIf you are a Denver homeowner that is reluctant to put money into your home, think again. Home improvements will increase the value of your home and will reduce the taxes due on your financial profit after selling the property.

Inman News recently discussed how home improvements can benefit those not looking to sell immediately, as well as the differences between improvements and repairs since they are different in the eyes of the tax code. A new bathroom or kitchen would be classified as a home improvement, while fixing up a leaky roof qualifies as a home repair and will not earn you any tax benefits in the future. In this scenario, you would need to add a new roof to your Denver home in order to benefit from any tax breaks.

These home improvements are added to the basis of the house for tax purposes. By putting $50,000 worth of work into your Denver home, your profit from selling the property is taxed by $50,000 less. Keep in mind that according to the home sale tax exclusion, single homeowners receive $250,000 in tax-free profit when they sell their home, while married homeowners receive $500,000 in tax-free profit. By completing home improvements as needed, you may be able to reach a point where you won’t have to pay any taxes when you sell your home!

For more information about local real estate and events, bookmark my Denver real estate blog. Leave a comment to share your experiences with home improvements and how they have affected your taxable financial gain after selling your home.

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