for tax purposes what is an improvement?

Answer 1

updating of the rental property, be it double glazing, new roof, new doors, interior improvement like a new kitchen - you can also claim back for repairs, cleaning of carpets, replacing carpets - replacing furniture if a furnished property - check with your accountant, if you have one, they are the best ones to ask.

PS I am in the uk, so if you are in the states I am not sure what applies.

Answer 2

Hi there

Firstly the tax rules are different in each country, e.g. UK is not the same as USA.. My explanation below is based on UK tax law.

If you have an investment property, such as a flat or house that you are renting, there are many costs you can offset against tax. One area that people often get confused with is improvements and repairs. Improvements are not eligible to offset against income (from property) tax, but repairs generally are.

So what is an improvement vs a repair?

Improvements are "adding to the property", examples would be building a garage, a loft conversion, building a patio/decking, etc.

Repairs are costs for fixing or replacing parts of the property. For example replacing the windows, new front door, etc. When you do repalce parts of the property if there is any money received for the 'old parts' this has to be deducted form your costs (e.g. scrap value of copper pipes, etc). Another factor is that you must be replacing with similar, e.g. if you rip out a tatty kitchen and replace with a top of the range kitchen then part or all of this cost this could be considered as an improvement.

Tax considerations. Repair costs are offset against rental income on your annual tax return. Improvement costs are eligible to be offset against any capital gain when you sell the property. You should speak to an accountant if this applies as tax treatment is compelx depending on when you purchased, whether you ever lived in the property, etc.

Also, here is a link to a Government website that gives you an overview about tax on rental incomes, etc. http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/fs/en

I hope this helps.

Answer 3

An improvement is any addition to the property that "improves" it's value. If you just got your tax bill you'll see it has a section for land with a value amount and an additional section titled improvements with another value. The two of them together total the amount your property is being taxed on. Most likely your improvements include your house and maybe your shed, fence, etc.

Answer 4

Depends. If it is for your home you live in, there is no tax break except if you sell it, which will be considered against the capital gains.

For investment property, any thing you buy to repair, enhance, or improve a house is tax deductable, but you better have your receipts in case of an audit by the IRS.

Answer 5

An improvement is an addition to your house that will increase the value of the property. An example would be, adding a second story, finishing basement, adding a bathroom, garage. You can ask any realtor for their professional opinion and it won't cost you a dime. Good luck!

Answer 6

An improvement is an addition to a property that is a capitalized cost; conversely, a repair is a necessary cost that can be expensed in the current year.

Answer 7

The money you spend on certain items to improve its value which is tax-deductible such as energy saving appliance, solar power...etc.

Answer 8

real estate is comprised of:
LAND and IMPROVEMENTS

Land is the ground, down to the center of the earth and as high above you as you can reasonably use, and natural items on the ground. Trees may or may not be part of the land.

Improvements are everything else: utilities, house, pavement, satellite dish, windmill, etc.

Answer 9

Moving to the Cayman Islands.

Answer 10

report what u should .no point cheat. money for nite drink n tip in niteclub? goes tax to people in need n jobless peoples.