HomeownershipHomebuying Glossary
Capital Improvement
A permanent upgrade that adds value to your home, as opposed to routine repair or maintenance.
In plain English
A capital improvement is a lasting upgrade — like a new roof, an addition, or a kitchen remodel — that adds value or extends a home's life, as distinct from routine maintenance like painting or fixing a leak.
Why it matters
Keeping records of capital improvements can reduce your taxable capital gains when you eventually sell, since they increase your home's cost basis.
Where you'll run into it
Guides and tools on TheBuyingPath that cover capital improvement in context.
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