Is a Kitchen Remodel Tax Deductible? What Wisconsin Homeowners Should Know
No, not in the year you pay for it, if the kitchen is in the home you live in. The IRS treats a kitchen remodel, listed as "kitchen modernization" in IRS Publication 523, as an improvement that adds to your home's basis. A higher basis lowers the taxable gain when you sell, and qualifying owners can exclude up to $250,000 of that gain, or $500,000 for a married couple filing jointly. In Wisconsin, a remodel can also raise your property tax, because assessments follow your home's market value as of January 1.
Published 2026-10-22 · 7 min read · 1,645 words
Kitchen project - T&JThere are a few exceptions, such as home equity loan interest and changes made for medical reasons. Here is how each rule works, with the records to keep. This is general information, not tax advice, so confirm your situation with a tax professional.
The Short Answer by Situation
| Situation | Deductible when you pay? | How it can help |
|---|---|---|
| Remodeling the kitchen in your own home | No | Adds to your basis, lowering taxable gain when you sell |
| Paying with a home equity loan or line of credit | The interest may be, if you itemize | Interest on money used to buy, build or substantially improve the home that secures the loan |
| Changes for a medical need, such as lowering cabinets for a wheelchair user | Possibly, as a medical expense | Only medical costs above 7.5% of adjusted gross income count |
| Energy-efficient upgrades in a 2026 remodel | No federal credit | The federal home improvement energy credit ended with 2025 |
| Repairs and maintenance | No | Repairs do not add to basis unless part of a larger project |
The federal Energy Efficient Home Improvement Credit, worth 30% of qualifying costs up to $1,200 a year, or $2,000 for heat pumps, only covers improvements made through December 31, 2025.
How a Kitchen Remodel Lowers Your Tax When You Sell
Your basis is roughly what you paid for the home plus the cost of improvements. IRS Publication 523 defines improvements as work that adds to the value of your home, prolongs its useful life or adapts it to new uses, and lists kitchen modernization among them.
A simple example, with numbers for illustration only:
Kitchen - T&JWant this priced for your kitchen?
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| Without the remodel | With a $45,000 remodel | |
|---|---|---|
| Purchase price | $300,000 | $300,000 |
| Kitchen remodel | $0 | $45,000 |
| Basis | $300,000 | $345,000 |
| Sale price | $700,000 | $700,000 |
| Gain | $400,000 | $355,000 |
| Taxable gain after a $250,000 single-filer exclusion | $150,000 | $105,000 |
For owners who qualify for the exclusion and sell their main home with a gain under $250,000, or $500,000 for a married couple filing jointly, the remodel makes no tax difference at all, because the whole gain is already excluded. The basis increase matters for homes with large gains, long ownership or rapid price growth.
Repairs are different. Fixing a leaky faucet or replacing a broken cabinet door is a repair and does not add to basis. IRS Publication 523 notes that repair work done as part of a larger project, such as replacing all the windows during a remodel, can count as part of the improvement.
Paying for It With a Home Equity Loan
Interest on a home equity loan or line of credit is only deductible when the money is used to buy, build or substantially improve the home that secures the loan, according to IRS Publication 936 for 2025 returns. A full kitchen remodel generally qualifies as a substantial improvement, since it adds value. The deduction is also subject to the overall limit on mortgage debt of $750,000, or $375,000 if married filing separately, and only helps if you itemize deductions. Interest on a credit card or personal loan used for the remodel does not qualify.
Kitchen Changes for a Medical Need
If you modify the kitchen for a disability or medical condition, part or all of the cost may count as a medical expense. IRS Publication 502 lists lowering or modifying kitchen cabinets and equipment among changes that usually do not raise a home's value, so their cost can be included in full. For an improvement that does raise the value, only the cost above that increase counts. Medical expenses are only deductible to the extent they exceed 7.5% of your adjusted gross income, and only if you itemize.
What About Energy-Efficient Upgrades?
Through 2025, the federal Energy Efficient Home Improvement Credit covered 30% of certain efficiency upgrades, such as qualifying windows, doors and heat pumps. The IRS says the credit is allowed only for property placed in service before December 31, 2025, and for improvements made through that date. A kitchen remodeled in 2026 does not get this federal credit. Efficient appliances and windows can still lower your energy bills, and utility programs may offer separate rebates.
Kitchen - T&JWill a Kitchen Remodel Raise Your Property Taxes in Wisconsin?
It can. The Wisconsin Department of Revenue's 2026 Guide for Property Owners explains how:
- Assessments follow market value as of January 1. If an improvement raises your home's market value, that should show up as a higher assessment.
- Value, not cost, is what counts. The assessor looks at how much the improvement changed the home's market value, and the guide notes that cost may not be the true measure of that change. A $45,000 kitchen does not automatically add $45,000 to your assessment.
- Building permits are a source. The assessor may change your assessment because of building permits or sales activity, even without inspecting your home.
- Timing matters. If work starts before January 1 and finishes after it, the assessor values what was completed as of January 1.
- Repairs usually do not change it. Normal repairs and maintenance generally do not warrant a change in the assessment.
To estimate the effect, find your municipality's net tax rate on your tax bill; the rate is often expressed in dollars per $1,000 of assessed value. Multiply it by the added value in thousands. For example, at an illustrative rate of $18 per $1,000, a remodel that adds $20,000 of assessed value would add about $360 a year. If you think the new assessment is wrong, the guide explains how to appeal to your municipality's Board of Review.
Skipping the permit to avoid a reassessment is a bad trade. Unpermitted work can mean double permit fees, opened walls for inspection and trouble when you sell; see what happens if you remodel a kitchen without a permit and our guide to kitchen remodel permits in Wisconsin.
Records to Keep
Keep everything that proves what you spent and when:
The signed contract and change orders.
Invoices and receipts
for labor, cabinets, countertops, appliances and materials.
Proof of payment,
such as bank or card statements.
Permits and final inspection records.
Before and after photos.
IRS Publication 523 says to keep basis records, in general, until 3 years after the due date of the tax return for the year you sell the home. For a kitchen you may live with for 20 years, that means keeping the folder for a long time.
Planning a Kitchen Remodel With the Numbers in Mind
A clear, itemized written estimate makes the paperwork easy later, for your basis records and for the assessor. Our kitchen remodel ROI guide covers how much value a kitchen adds, and our guide to finished basements and property taxes in Wisconsin shows the same assessment rules applied to a basement.
T&J is a father-and-son team that has worked in Wisconsin since 1989. John is your single point of contact from the first call through the final walkthrough, Telli is on site running the work, and T&J gives a written 2-year warranty. Homeowners from Brookfield to Mukwonago and across Waukesha County can see our kitchen remodeling services or request a free in-home estimate.
Kitchen - T&JFrequently asked questions
Is a kitchen remodel tax deductible?
Not in the year you pay for it, for the home you live in. It adds to your home's basis, which lowers the taxable gain when you sell.
Can a kitchen remodel be a tax write-off?
Only in specific cases: interest on a home equity loan used to substantially improve the home, if you itemize, or changes made for a medical need, above 7.5% of adjusted gross income.
Does a kitchen remodel increase property taxes in Wisconsin?
It can. Wisconsin assessments follow market value as of January 1, and an improvement that raises your home's value should raise its assessment. Assessors can learn of the work through building permits.
How much will my property tax go up after a kitchen remodel?
Multiply the added assessed value, in thousands, by your net tax rate per $1,000. At an illustrative $18 per $1,000, $20,000 of added value is about $360 a year. The added value is set by the assessor and is often less than what you spent.
Are there tax credits for an energy-efficient kitchen in 2026?
Not the federal home improvement energy credit; it covers only improvements made through December 31, 2025. Check your utility for rebates.
Is a new kitchen a repair or an improvement for taxes?
An improvement. IRS Publication 523 lists kitchen modernization as an improvement that adds to basis; routine repairs do not.
How long should I keep kitchen remodel receipts?
In general, until 3 years after the due date of the tax return for the year you sell the home.
Pricing is based on our own recent projects. Written by John (PM, 14 yrs) and reviewed by Telli, who has been remodeling in Wisconsin since 1989. Published 2026-10-22.
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