Is a New Roof Tax Deductible? Basis, Credits, and Rental Property Rules

A new roof on the home you live in is not deductible in the year you pay for it, but the IRS lists “new roof” as an improvement that increases your home’s basis, which can lower the taxable gain when you sell. On a rental, the roof is capitalized and depreciated over 27.5 years, and neither federal home energy credit, 25C or 25D, covers a roof installed in 2026.

Which rule applies depends on how the property is used: your own home, a rental, or a home with a business-use share. Each has its own IRS publication, and each needs the same paper trail.

Your Own Home: A New Roof Raises Your Basis

Basis is, roughly, what you have invested in the home: the purchase cost plus improvements. IRS Publication 523 (2025), Selling Your Home says “you add the cost of additions and improvements to the basis of your property,” and its table of examples of improvements that increase basis lists “new roof” under exterior work.

That matters at sale. Your gain is roughly the amount you realize from the sale minus your adjusted basis, so every dollar of documented improvement lowers the gain. Publication 523 also explains the exclusion that lets qualifying sellers leave some gain untaxed. If your gain could exceed that exclusion, the roof’s cost in your basis reduces the taxable part; if it cannot, the roof still belongs in your records in case your situation changes before you sell.

Hypothetical example: You bought a house for $200,000 and later paid $14,000 for a full roof replacement. Your basis becomes $214,000 before any other adjustments. If you sell for $480,000 with no other improvements or selling costs, the gain is $266,000 instead of $280,000. Whether any of it is taxable depends on the exclusion rules in Publication 523.

The line between repair and improvement is where the rule turns. Publication 523 says you can include repair-type work only “if it is done as part of an extensive remodeling or restoration job.” Replacing a few blown-off shingles or resealing a pipe boot is a repair; on its own, it does not go into basis. A full tear-off and replacement is the improvement the IRS lists.

If an insurance settlement paid for part of the roof, ask a tax professional how that payment affects basis before you add the full contract price to your records. Whether the new roof changes your sale price is a separate question, covered in whether a new roof increases home value.

Roof Tax Credits in 2026: What Ended and When

Two federal credits sometimes come up in roofing sales pitches. Neither is available for a roof installed in 2026.

The Energy Efficient Home Improvement Credit (section 25C) did not cover ordinary roofs in its final years. The IRS page on the Energy Efficient Home Improvement Credit lists the qualifying building envelope components for 2023 through 2025 as exterior doors, exterior windows and skylights, and insulation and air sealing materials; roofing is not on the list. The credit then ended. The IRS FAQs on the Public Law 119-21 changes to sections 25C and 25D (FS-2025-05, August 21, 2025) state that “the credit will not be allowed for any property placed in service after December 31, 2025.”

The Residential Clean Energy Credit (section 25D) did cover solar roofing. The IRS page on how to claim a residential clean energy tax credit says “traditional building components that primarily serve a roofing or structural function generally don’t qualify,” while solar roofing tiles and solar shingles did “because they generate clean energy.” That credit also ended: the same IRS FAQs say it “will not be allowed for any expenditures made after December 31, 2025,” and an expenditure counts as made “when the original installation of the item is completed.”

The timing rule is the trap. A solar roof contract signed in 2025 but finished in 2026 does not qualify, because the installation was completed after the cutoff. For how building-integrated solar compares as a roof, see solar shingles vs. solar panels.

These are federal rules only. If a contractor cites a state incentive, ask for the program name and look it up on your state revenue or energy office site before you count on it.

Rental Roofs: Depreciation Over 27.5 Years

On a rental property, a new roof is a capital improvement, not a current-year expense. IRS Publication 527 (2025), Residential Rental Property says “you must capitalize any expense you pay to improve your rental property,” and its Table 1-1 lists a new roof as an example.

Publication 527 defines an improvement as an expense that results in a betterment, a restoration or an adaptation of the property, and notes that “expenses for replacing a substantial structural part of your property” may be a restoration. A full roof replacement fits that description. Under the General Depreciation System, residential rental property and its improvements are depreciated over 27.5 years.

Hypothetical example: A $13,750 roof on a rental, recovered over 27.5 years, works out to about $500 for each full year. Publication 527 shows how to figure the exact amount for the year the roof is placed in service.

Smaller roof repairs on a rental are handled differently from improvements. The test is whether the work betters, restores or adapts the property, and patch-level repairs are the kind of spending those tests are meant to separate out. For how a repair that is not an improvement is reported in the year you pay for it, check the repairs discussion in Publication 527 or ask your preparer. When a project falls in between, such as replacing one full slope, get a tax professional’s answer before filing.

Home Office Use: The Business Share of the Roof

If you claim the home office deduction, the roof can count in part. IRS Publication 587 (2025), Business Use of Your Home lists “repairing roofs and gutters” among common repairs, and treats repairs that benefit the whole home as indirect expenses “deductible based on the percentage of your home used for business.” Its own example: with 10 percent business use, you deduct 10 percent of a furnace repair.

A full replacement is different. Publication 587 says a permanent improvement “increases the value of property, adds to its life, or gives it a new or different use,” and it treats a new roof added after business use begins as an improvement that is depreciated rather than deducted at once. The business share of that cost goes into your home office depreciation; have your preparer show how the roof’s cost and that depreciation carry into your home’s basis.

Records to Keep for the Roof

Whichever rule applies, you need to be able to prove the cost if the IRS asks. Put these in one folder with your home purchase closing documents:

• The signed roofing contract, including any change orders.
• The final invoice showing the scope, materials and total.
• Proof of payment: canceled checks, card statements or loan disbursement records.
• The building permit and final inspection approval, which date the work.
• Any insurance settlement letters if a claim paid for part of the job.
• For a rental or home office, the date the roof was placed in service.

Keep the folder for as long as you own the property, and ask your tax professional how long to keep it after you sell. The same contract and invoice also show buyers and appraisers what the roof cost, which the roof replacement cost guide breaks into its parts.

Which Tax Rule Applies to Your Roof?

Find your row, then take the action in the last column.

If your situation spans two rows, such as a duplex you live in and rent out, or an insurance payment that covered part of the roof, take the folder to a CPA or enrolled agent before you file. If you have not paid for the roof yet, the roof financing comparison covers how to fund it.

This guide is general information for U.S. homeowners, not legal, insurance, tax, or engineering advice. Codes, laws, and policy terms vary by location and change over time; confirm details with your local building department, your insurer, or a licensed professional.

Sources

• Publication 523 (2025), Selling Your Home, Internal Revenue Service
• Energy Efficient Home Improvement Credit, Internal Revenue Service
• FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB), Internal Revenue Service
• How to claim a residential clean energy tax credit, Internal Revenue Service
• Publication 527 (2025), Residential Rental Property, Internal Revenue Service
• Publication 587 (2025), Business Use of Your Home, Internal Revenue Service