Is a new roof tax deductible, and how does it affect your taxes when you sell?

How basis works

Your basis is roughly what you paid for the home plus the cost of capital improvements, such as a new roof, an addition or a new heating and cooling system. When you sell, your gain is the sale price minus selling costs minus your adjusted basis. Owners who lived in the home for at least two of the five years before selling can exclude a large amount of gain, but long-time owners in rising markets can exceed that exclusion, and then every documented improvement counts.

Improvement or repair?

• Adds to basis: a full roof replacement, including tear-off, decking, underlayment, flashing and ventilation installed as part of it.
• Does not: routine repairs like replacing a few shingles or a pipe boot on your own home. They are neither deductible nor added to basis.
• Insurance-paid roofs: when a claim paid for the roof, the basis effect differs from a roof you paid for yourself, so ask a tax preparer.

If the house becomes a rental

The roof's cost becomes part of the depreciable basis, recovered over 27.5 years for residential rental property. Good records make that conversion easy.

What to keep

• The signed contract and final invoice.
• Proof of payment.
• The permit and final inspection.
• The warranty registration.

Keep them as long as you own the home, plus a few years after selling. See roofing warranties explained and roof replacement cost in Georgia. This is general information, not tax advice.