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Calculating Your Home Value Using Cost Basis

To find out how much your home has increased in value, you have to identify its COST BASIS - everything that you spent to improve value of your home. A capital improvement is defined as a home improvement that adds market value to the home, prolongs its useful life or adapts it to new uses.

Capital improvements and things you can put in your COST BASIS include: The price you paid for the property, including settlement costs, such as: title fees, legal fees, recording fees, survey fees, and any transfer taxes or fees you paid in connection with the purchase.

Additions: An added extra bedroom or bathroom, a deck on the back of the home, a new garage, an added porch or patio....anything that adds value to your home.

Lawn and grounds improvements: Landscaping projects, driveway or walkway construction, a new fence or retaining wall, adding a swimming pool, etc

Exterior improvements: New windows, a new roof, new siding, new fences etc. All renovation costs including ANY and ALL costs related to that renovation work can be included.

Installing new systems: A new heating, air conditioning system, central vacuuming system, electrical upgrades, security system, solar, generators, large capacitor, and lawn irrigation are all improvements.

Plumbing: Installing a septic system, water heater, or soft water system adds value.

Interior improvements: New appliances, kitchen renovations, new flooring/carpeting, the installation of a fireplace, etc.

Remember, minor repairs and maintenance jobs like changing door locks, repairing a leak or fixing a broken window do not qualify as capital improvements.


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