Home improvement is an ongoing process of renovating or maintaining a house, or installing fixtures, appliances and other items to improve it. Home improvement projects can be small, like re-grouting tile or painting, or large, such as adding an addition. Some projects can be done by a homeowner, while others require professional help. The most common reason homeowners undertake home improvement projects is to increase the value of their property.
Other reasons include a desire to customize the home to fit their lifestyle or needs, and the fact that some problems—like a leaky roof or electrical issues—are safety hazards that must be addressed immediately. Homeowners spent about $522 billion on 115 million projects last year, according to the most recent American Housing Survey.
Almost three-quarters of the homeowners who responded to NerdWallet’s September survey said they are “easily able to pay for the majority of their home repair/improvement projects without having to dip into savings or go into debt.”
A few types of home improvement projects can have big returns: sparkling bathroom overhauls, deck construction and adding a garage or gazebo are on the list of top return-on-investment renovations. And converting a non-conforming space into a primary master suite can also boost resale value.
Some home improvement contractors may charge sales tax on their labor, while others are exempt from that obligation based on whether the project meets the definition of a capital improvement. Check with your state’s department of taxation and finance for specifics on what qualifies as a home improvement.