There’s a lot of confusion amongst homeowners over what to call the work being done on your home. Remodel, renovation, repair, maintenance, improvement – these are all terms that different people may use to describe the same work. As far as funding or financing the work goes, as well as finding the right Pro for the job, most projects can be classified in one of two ways; as a home improvement or as a home repair. Understanding the difference between the two can help you pay for the project, know what work you can deduct from your taxes, and find the right person to take on the work.
What Is a Home Repair?
A home repair is something that you do to your home to maintain its current value. A lot of people mistake home repairs as something that costs less money, such as under a certain dollar amount, but home repairs can cost thousands of dollars – even more than some home improvements in fact.
An example of a home repair would be to replace your roof if it were to become damaged. A home without a roof could lose value because it could be damaged by the elements, so repairing or replacing your roof is considered a way to maintain your home’s value.
What Is a Home Improvement?
Home improvements increase the value of your home. A lot of different types of projects fall under home improvements – putting on an addition, finishing an attic or basement, renovating a kitchen or bathroom, or replacing existing surfaces with newer, better versions.
Think back to the roof replacement. If your roof is in good condition but dark in color, and you live in a hot climate, you may replace your roof with a new, white shingled material to reflect heat and save on energy costs. This is not a repair, but an improvement, because it just increased the value of your home.
Another way of looking at it is this: you will recoup a portion of the money that you spent on home improvements when you sell your home by increasing the selling price to reflect the improvements you’ve made to the property. Home repairs don’t increase your home’s value, they only stop it from losing its current value.
Funding Home Repairs
A lot of people sit on necessary home repairs far longer than they need to simply because they think that their home repair is an improvement, and out of their budget. Because a repair is helping your home to maintain value, however, there are ways you can help offset the costs.
The first is state and federal grants. Depending on where you live, the condition of your home, and whether or not the damage was caused by a storm that affected many homes in your area, you may be eligible for a state or federal grant to offset the cost of the repairs. You can find out more by visiting your town hall.
The second is through lowered Pro pricing. Some Pros have contracts with the state or town they work in to do home repairs at a discounted rate to eligible residents. Check with your town hall to find out if you may be eligible to have your work done at a discounted rate.
The final way is by deducting the cost of your home repairs from your taxes. Remember, a home repair is maintaining your home’s current value, and you pay taxes to the state based on that value. If you maintain this value, then you are eligible to deduct the expenses from the taxes you pay on your property each year.
Unfortunately, home improvements are often not eligible for these discounts or tax breaks. This is because you are expected to recoup at least part of the cost at the time you sell your home. Home improvements often also help homes sell more quickly, which is often enough incentive for most homeowners to act.
Find the Right Person for the Job
Pros often specialize not just in the area of the home they work on, but also on the type of project that they undertake. You may find that some Pros work solely on repairs or historical renovations, while others focus more on home improvements. Our matching software will help you find the right Pro for your project, no matter what it looks like, so sign up today to get started.