The Ultimate Guide to Tax-Deductible Home Renovations in Franklin, Brentwood & Nashville, TN

Maximize Your Home Renovation with Tax Savings

Home renovations aren’t just about improving comfort and style—they can also offer tax benefits if you know what qualifies. Whether you're upgrading your kitchen, adding energy-efficient systems, or making your home more accessible, certain improvements can reduce your taxable income or increase your property value without adding extra tax burdens.

If you're planning a kitchen renovation in Franklin, Brentwood, or Nashville, TN, or considering a larger home improvement project, this guide will help you understand:
✅ Which renovations qualify for tax deductions
✅ How home office and rental property improvements can be tax-deductible
✅ The difference between capital improvements and standard home repairs
✅ How to use a mortgage to fund renovations and maximize tax savings

IRS Requirements for Tax-Deductible Home Improvements

Not all home renovations qualify for tax deductions, but if they meet IRS capital improvement requirements, they can increase your home’s tax basis, reducing the taxable profit when you sell. To qualify, improvements must:

✔ Substantially increase the value of your home
✔ Extend the home’s useful life
✔ Be permanent and adapt the property for a new use

For example, kitchen renovations that modernize outdated appliances, install new countertops, or upgrade cabinetry typically qualify. Likewise, installing energy-efficient HVAC systems, solar panels, or storm windows may provide immediate tax credits.

See What You Qualify For

If you're making any of these upgrades in Franklin, Brentwood, or Nashville, TN, you might be eligible for tax deductions or credits:

✔ Energy-efficient improvements – Solar panels, heat pumps, insulation, and energy-efficient windows qualify for a 30% federal tax credit.
✔ Home office renovations – If you run a business from home, part of your kitchen remodel or home upgrade may be deductible.
✔ Medically necessary renovations – Widening doorways, adding ramps, or modifying bathrooms for accessibility can be deducted as medical expenses.
✔ Rental property renovations – If you rent out part of your home, renovations may be fully deductible as a business expense.

IRS Requirements: Home Renovations vs. Home Repairs

Home Renovations (Tax-Deductible When Selling)

Certain renovations can be added to your home’s adjusted cost basis, reducing capital gains taxes when you sell. These include:

✔ Full kitchen remodels
✔ Bathroom upgrades
✔ Energy-efficient appliances and insulation
✔ New roofing and siding

Home Repairs (Not Immediately Deductible)

Routine maintenance does not qualify for tax deductions. These include:

❌ Repainting walls
❌ Fixing leaky faucets
❌ Patching drywall
❌ Replacing broken tiles

However, if repairs are part of a larger renovation project, they may be considered capital improvements.

Take the First Step Toward the Right Mortgage

If you're considering a home renovation in Franklin, Brentwood, or Nashville, TN, financing your project through a HELOC, cash-out refinance, or home equity loan can provide additional tax benefits. Mortgage interest is often deductible when used to improve your home, making financing a smart option.

Additional Tax Benefits from Home Improvements

1. Home Office Upgrades

• If your kitchen renovation includes a workspace, you may qualify for a home office deduction.

• Exclusive and regular use of the space for business is required to claim this benefit.

2. Home Improvements for Medical Care

• Installing ramps, widening doorways, and modifying kitchens for accessibility qualifies as a medical expense deduction.

3. Energy-Efficient Improvements

• Solar panels, wind turbines, and geothermal heat pumps qualify for a 30% federal tax credit.

• Energy-efficient appliances may also reduce state taxes.

4. Rental Property Maintenance

• If you're a landlord in Brentwood, Franklin, or Nashville, TN, rental property improvements may be fully deductible as business expenses.

5. Improvements Made Using a Mortgage

• HELOCs, cash-out refinances, and home equity loans can provide tax-deductible interest when used for renovations.

Need Extra Cash for Home Improvement?

If you’re upgrading your home, consider financing options like:
💰 HELOC – Best for homeowners needing flexible renovation funds.
💰 Cash-out refinance – Best if you want to lower your mortgage rate while funding renovations.
💰 FHA 203(k) loan – Best for major renovations, allowing you to roll repair costs into your mortgage.

How to Claim Your Home Improvement Tax Deduction

✔ Keep all receipts and contracts for renovations.
✔ Work with a tax professional to determine eligibility.
✔ File IRS Form 5695 for energy-efficient home improvements.
✔ Use Form 8829 for home office deductions.
✔ Report capital improvements on Schedule D when selling your home.

The Bottom Line: You Can Deduct Certain Home Improvements on Your Taxes

Whether you’re planning a kitchen renovation in Franklin, Brentwood, or Nashville, TN, or upgrading your entire home, strategic renovations can lower your tax burden. Capital improvements, energy-efficient upgrades, and home office renovations may qualify for deductions or tax credits—helping you keep more money in your pocket.

If you're looking for professional renovation services in Franklin, Brentwood, or Nashville, TN, or need advice on maximizing your tax savings, consult with a Franklin Construction today.