A home improvement loan can be helpful for major home upgrades like roof replacement, which involves significant costs. Given your loan meets certain criteria set by the IRS, you can claim a tax deduction on its interest.
In this post, one of the most trusted roofing companies in the area, New View Roofing & Remodeling, explains the conditions for a tax-deductible interest on home improvement loans.
The Property Must Be Your Primary Residence
The first condition is the property must be under your name and your primary residence. You must also be the borrower on the loan and it must be secured by the property. If your loan doesn’t meet this criterion, it makes you automatically ineligible, unless you’re using a home equity loan or a home equity line of credit (HELOC).
Homeowners used to have home equity loans and HELOCs cover their debts and vacations and were able to get a tax deduction. That’s no longer allowed under the new tax law, effective from 2018 to 2026.
The Loan Must Be Used for Substantial Home Improvements
Your home upgrades must improve the value of the property or its long-term functionality. These may include major home improvements like adding new rooms, kitchen or bathroom remodeling, new siding installation, and replacing the entire roof. Choose a reliable roofing contractor like New View Roofing & Remodeling for your roof replacement project for energy-efficient and durable roofs.
Other substantial capital improvements may include paving the driveway, installing a new air conditioning or heating system, insulating the home, building a swimming pool, and total home rewiring. Remember that routine maintenance and routines don’t qualify for tax deductions. If you meet the two mentioned conditions, then you may proceed to claim your tax deduction.
It’s still a good idea to consult a CPA before starting your home improvement project to ensure your tax deduction eligibility. However, when it comes to high-quality roof replacement services, you can trust New View Roofing & Remodeling, your local roofing contractor. We also offer roof maintenance and comprehensive inspections. Call us at (469) 250-0016 or complete our online form for a free estimate. We work with homeowners in Dallas.