Can I Claim A New Roof On My Tax Return?
That depends. Roof repairs are part of the regular and timely work responsible homeowners are expected to complete to protect their overall investments. That is considered regular maintenance and not a deduction. An entire new roof for your residence is considered a home improvement but is also not a tax deductible expense.
According to H&R Block, a roof replacement home improvement adds to the basis of your property. They explain, “For most homeowners the basis for your home is the price you paid for the home or the cost to build your home.” Home improvements, when factored in become the adjusted basis.
What they don’t mention is that the IRS offers residential energy efficient property tax credit for specific, qualifying roofing materials, such as metal or asphalt shingles with solar-reflecting granules. Labor is not part of the equation. When homeowners invest in a new roof, many are adding solar, which also qualifies for energy efficient tax credits. You can check with the IRS, your tax person, or a professional roofer for the credit limits and years the tax credits are in effect.
A professional roofer can also help you choose the right roofing material for your home’s climate and for the roof slope. A new roof is a big investment and making the right choices can impact your roof’s longevity.
If you are like a growing number of homeowners who maintain a home office, you will want to check with your tax advisor about possibly writing off a portion of the roof that covers your home office.
Do Residential Rental Property Tax Rules Differ?
If your roof replacement is for a residential rental property, the answer about tax deduction remains the same. It is considered a capital expense and can be deducted only through depreciation, unless of course it qualifies for any residential energy efficient tax credits.
What About Roofs on Commercial Buildings?
Owners of commercial property benefit from the changes contained in the Tax Cuts and Jobs Act (TCJA) applied to deducting expenses under Section 179(a) and on deducting depreciation under Section 168(g) of the IRS codes, “The Section 179 deduction applies to tangible personal property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer elects, qualified real property. The TCJA amended the definition of qualified real property to mean qualified improvement property and some improvements to nonresidential real property, such as roofs…”
Simply put, new commercial roofs (up to 2.5 M) can now be written off in full, in the year they went into service. It is always a good idea to check with a tax person for all the detail and to verify the years it will be in effect, as tax laws.