Home improvement is the process of renovating or making additions to one’s residence. This includes renovations such as painting or re-grouting tile, but can also include adding more living space with the construction of an extension or basement, and other projects that increase comfort, functionality, or security. The home improvement industry includes the sale of building materials, appliances, and decor, as well as the hiring of contractors or tradespeople for construction and installation work.
It is important to consider the return on investment (ROI) when undertaking any home improvement project. This will help to determine whether the improvements are worthwhile and if they add value to the property. However, the ROI of any home improvement project will vary depending on the type and extent of the improvements, the local market, and the overall housing market.
Some common home improvement projects that increase property values include refinishing hardwood floors, installing energy-efficient windows and appliances, and updating kitchens and bathrooms. However, homeowners should be careful not to overspend and over-improve their homes, as this can reduce the home’s resale value.
In addition to ensuring that the projects they hire professionals for are eligible for tax-exemption, homeowners should be sure to clearly establish with contractors a payment schedule and to keep detailed records of all payments made. In New York State, for example, it is necessary to have documentation that a project qualifies as a capital improvement to be exempt from sales and labor taxes on the material costs of the project.