Spend an afternoon watching the home channels and landscaping improvements become even more appealing. Should you use your HELOC to make them happen? We’ll weigh the pros and cons of investing in landscaping improvements in today’s market.
Will Landscaping Improvements be Tax-Deductible?
First, as a professional landscaping company, we’re not tax professionals. We encourage you to consult with your CPA or tax attorney before making any assumptions.
Second, it depends. With the change in the tax law, there are new limits to deductions on mortgage interest and HELOC interest.
Previously, for households who itemized deductions, you could deduct qualifying mortgage interest for home purchases up to $1 million dollars plus an additional equity debt of $100,000.
The new law was initially understood to eliminate the interest deduction on HELOCs, home equity loans and second mortgages. The IRS clarified in February of 2018 “interest on home equity loans often still deductible under new law.”
According to The Tax Cuts and Jobs Act of 2017, the deduction for interest paid on HELOCs and home equity loans is suspended from 2018 until 2026 unless the funds are used to buy, build or substantially improve the taxpayer’s home which secures the loan.
There is also a total limit of interest on a total loan amount of $750,000. Again, consult with your tax professional based on your personal home loan and home equity loan scenario before you make any major decisions.
If you are within the criteria, the caveat is, if you are using the funds to improve your home in some capacity, such as renovations, the interest remains tax deductible. If you use the HELOC to fund a child’s gap year in Europe or pay off credit cards, it’s not.
Should You Use a HELOC for Landscape Improvements
According to the National Association of Realtors® Research Department, the number one project which appeals to buyers is a standard lawn care program.
An upgrade to a seed lawn had the highest cost recovery with 417 percent of the cost estimated by landscape professionals. Upgrading to a sod lawn followed with 143 percent.
Landscape upgrades overall scored well and rendered approximately 100 percent. These included new patio, new desk and softscape upgrades. Softscapes include trees, shrubbery and other plantings.
A pool received high scores in the joy of ownership category, but estimates suggest only 50 percent of the cost is recovered. Pools can sometimes make a home more challenging to sell, if it eats up a lot of the yard or if the prospective owners are not swimmers. Others express concern about the liability insurance and maintenance costs.
Realtors interviewed consistently cited curb appeal as a recommendation to buyers. Of those interviewed, 96 percent have suggested curb appeal improvements before listing a home. When representing a home seller, 99 percent of NAR members believe curb appeal is critical to buyer attraction.
Whether you plan to list your home next week or next year, at Hittle Landscaping, we believe curb appeal is a great thing. Do it for yourself as much as any potential buyer.
Call the Professionals at Hittle for Your Landscaping Improvements
Call Hittle Landscaping today for a complimentary consultation. We’ll marry our expertise and experience to your ideas to turn your dreams of into reality. Reserve an appointment with a designer now so we can begin your landscaping improvements this spring.
Family-owned and operated for more than four decades, Hittle believes in Honesty, Innovation, Thankfulness and Teamwork. How can we assist you today?