Home improvement is a multibillion-dollar industry that includes retail sales of building materials, appliances, decor, and DIY projects, as well as services performed by contractors and tradespeople. The business has seen healthy growth results in recent years, especially during the COVID-19 pandemic, and homeowners’ interest in enhancing their homes is expected to continue as the economy improves.
The reasons for undertaking a home renovation project vary, but may include a desire to increase comfort and/or aesthetics, maintenance and repair work, improving energy efficiency, adding space by expansion or addition, or a combination of these. For example, replacing worn flooring can add an immediate upgrade to a room’s appearance and feel, while adding new insulation can help cut utility bills.
Before making improvements to your home, consider how long you plan to remain in it and how the upgrades will affect your resale value. Also, keep in mind that the highest-end upgrades rarely recoup the cost and may even decrease your property’s value.
Depending on the project, your choice of contractor could have an impact on the overall cost and schedule. To reduce the chances of unexpected expenses, you should always get several estimates from reputable contractors and give yourself some wiggle room in your budget. Also, don’t base your decision on price alone – a contractor may be less expensive, but that doesn’t necessarily mean they will complete the job to your satisfaction or on time.
If you’re planning a home improvement project, be sure to get a written contract from the contractor and carefully review it before signing. The contract should clearly state the project’s total cost, a payment schedule, and as many details about the work as possible, including specific types or brands of materials. The contract should also require the contractor to obtain any required permits and inspections and to provide proof of insurance coverage.
You can also ask friends and neighbors to recommend a contractor, or check the contractor’s website or Facebook page for customer reviews. When choosing a contractor, you should take into account their experience and reputation, as well as their ability to complete the work on time and within your budget.
In New York, if you have documentation that your project meets the definition of a capital improvement, it’s exempt from sales tax, except for the cost of the materials. To get this documentation, you must submit a form known as a Certificate of Capital Improvement (ST-124). If the work isn’t a capital improvement, you must pay sales tax on the full amount. If you’re unsure whether your project qualifies, contact the Department of Taxation and Finance for more information. You can also visit a local department store to speak with a home improvement specialist. The staff can advise you on the type of documentation you need to prove that your project meets the capital improvement definition. Then, you can apply for a tax exemption. This will save you money in the long run.