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5 Homeowner Tax Breaks You Should Be Taking Advantage Of

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2019 comes with some tax reform and specific changes that you and your CPA should be aware of. Regardless, there are specific tax breaks you as a homeowner should be taking advantage. The tax changes did not affect these write-offs, but it is always good to check with your accountant before assuming you can receive a credit for anything.

Interest on home-improvement loans

The IRS considers the interest on a home-improvement loan fully deductible, up to $100K in debt. So if you’ve been holding off on making those home changes, consider using a loan so you can write off the interest. In addition, interest paid on a home equity line of credit (HELOC) is also tax-deductible. However, keep in mind that any home loan that is worth more than the value of the property is not deductible.

Property Tax

You might think all of your property taxes are deductible, and in most cases you would be right. Though, there are some specific things on your settlement document that might look like taxes but aren’t. You cannot deduct your attorney and appraisal fees, title insurance and credit report costs either.

Residential Renewable Energy Tax Credit

If you made efforts to make your home more energy-efficient then you could qualify for the energy-efficiency tax credit. This credit includes solar, wind, geothermal and fuel-cell technology. So, if you installed solar panels, solar-powered water heaters, wind turbines or geothermal heat pumps then you may qualify for this tax credit.

Non-business Energy Property Tax Credit

In addition to the major energy-efficient renovations, you could also qualify for the nonbusiness energy property tax credit. This would include more minor upgrades to the home, such as home insulation, exterior doors, exterior windows or certain roofing materials.

Home improvements for medical purposes

This is an interesting one and many times overlooked. If you made any home improved that were related to a medical necessity then you can deduct the cost of the home improvement under medical expenses. Let me give you two scenarios in which this could be applicable:

A first time homebuyer has to remove all the carpets in their new house because the carpets were so full of pet dander from the previous owners. As a result, the new homeowner was having asthma attacks or trouble breathing. Removing the carpets and replacing them (with whatever they choose) would be deductible under medical expenses if you can provide documentation proving the medical issue.

In another scenario, and elderly woman had an accident and fell in her shower. She broke her hip and would be in recovery for months. Medical recovery prevented her from climbing stairs or climbing into a bathtub. The issue was the only walk-in shower she had was upstairs on the second floor. As a result she had to remodel one of her down stair bathrooms into a walk-in shower. This could be deducted under medical expenses as long as she provided all necessary documentation.

We hope all this information was helpful as you work on your tax return this year. Don’t forget to check everything with your accountant. And don’t forget to hire Divinity Inspection Services for your residential or commercial property inspection needs. 

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When To Schedule A Walk Through And When To Skip It

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Every home buyer encounters love at first sight when they are on the hunt to purchase a home. At least once you will find yourself drooling over pictures of what could be your future house. However, pictures can most certainly be misleading and your time is precious. So before you jump on the phone to schedule a walk through with your realtor, take a second look at those picture. Here are some specific home defects you can look for.

Spacing can be a giveaway

The most popular pictures for selling a home is using a wide scope. This has become a trend in the last few years. And while a wide scope can help give you the full picture of a room, it can also really misshape the space of the room. The house could seem much bigger than it actually is. This is when you encounter disappointment after taking the time to schedule a walk through.

Before you put the house on your calendar take another look through the photos. One way to check the spacing is by looking at items and the distance from one to another. For example, if you are looking at a wide scope picture of a kitchen then you can look at the distance between the appliances. Even in a wide scope photo this should be a pretty good giveaway of the actual space.

Look at the walls and ceilings

In most photos you will have walls in the backgrounds. Sometimes the photos will include the ceilings. Here you can check for any major cracks, discoloration or stains. I wouldn’t make any assumptions based on what you see, but if you do spot a major concern then it could be a dead giveaway.

In many cases, new paint will cover any discoloration that would elude to water damage or mold. You don’t need to worry because if there is any, we’ll find it in the home inspection.

Landscaping can also give you clues

You may be surprised at what you can find in the pictures around the home. Many people overlook clear signs of standing water, flooding or other damage. For example, you may see on the outside of the house a line of debris. This is usually an indication of high water. The house could have problems with drainage.

Also take a look at Google’s satellite image of the neighborhood. Do the neighbors take care of their lawns and homes? This is minor but could be an indication of the kind of neighborhood the house is situated in.

Don’t let pictures deceive you. These homes waste your time and energy when there are many homes you could fall in love with. However, don’t be afraid of any undiscovered concerns. By hiring the right home inspector, you have nothing to worry about.

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What to expect in a Home Inspection

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Every home inspection is different and each home inspection brings its own challenges, but there are some common finds with each home inspection. Even property inspections have common defects. On our Divinity Inspection website, we like to make sure every customer has a clear expectation of what to expect with our services, and sometimes that means discussing some of the more common issues we find. You can also look at our defects page for pictures and more information, but probably the most common misconception about our home inspections is that we’re there to scare you. We’re not, we’re there to educate you. You WANT to learn about your home and we WANT to tell you all about it.

That being said, we want to note that not all inspectors are the same. Some inspectors don’t believe in continuous training / learning like we do. All of our inspectors go through weekly updated training to stay updated in building science, inspection training, and much more. You can be confident that our inspectors will not only give you a thorough report but will be highly trained in their specialty.

Roofing issues

Issues with the roof can vary from very minor, such as replacing a few shingles, to major such as replacing a new roof. In some cases, the roof doesn’t need to be replaced right away, but we will know if it will need to be replaced in the next few years and will be able to give the buyer a heads up so they can prepare financially for that big cost.

Foundational Issues

We always hope that we don’t find foundational issues with a home. No need to freak out because sometimes the foundational issues aren’t extremely major. Did you hear about the time we found a tree stump under the house? (We have a picture of it) Not a big deal…as long as the tree stump doesn’t grow.

Electrical Wiring

Of all the common defects we find, electrical wiring is almost guaranteed! Whether the outlets need to be changed or updated, or the wiring throughout the house is no longer up to standard, there’s almost always something that needs to be done in this category. Many times the “do it yourself” jobs, or what we like to call the “handyman special”, simply don’t pass inspection. The good news is, more often than not, the electrical wiring issues that we find is not what we consider a “major” issue and takes little effort to fix.

Plumbing Issues

If a defect could be more common than electrical wiring it would be plumbing issues. Leaking, outdated, or problematic systems occur in many homes and properties. If the home has been well maintained, then these plumbing issues tend to be a fairly easy fix. However, if the home has not been well maintained these plumbing issues can become major issues very quickly.

With Divinity Inspection services you have nothing to fear and nothing to feel anxious about. We will walk you through every single piece of your home and talk to you about your potential maintenance, future costs, immediate concerns, and more. Call us now to schedule your home inspection!