Exterior painting can be a substantial financial commitment, but that new paint can significantly extend the life of your home’s wood siding.  Paint keeps out water, which can cause rot, swelling, sagging, bulging, and also lead to mold.  Interior painting of a rental property, meanwhile, provides an important visual refresh that can make the property look newer and more appealing for current or prospective tenants.


Is Painting a Capital Improvement?

Investors have asked whether painting is a capital improvement, since the answer determines how the expense should be treated when completing your annual tax return.  Read on to learn more about how to treat the expense of painting a rental property at tax time.


Painting Costs 

New paint can help revitalize an investment property, but it can be costly.  Experts suggest repainting your rental home’s exterior about every five years, or more often if you notice areas lacking paint with exposed wood.  If you decide to do the job yourself, expect to spend between 40-60 hours.  If you hire a licensed painting contractor, expect to pay between $3,000 and $5,000, though costs could be much higher for larger homes or two-story hillside homes with hard-to-reach areas.

For interior painting, expect to pay between anywhere from $2,000 to $10,000.  Costs will vary greatly depending on the quality of paint, size of your home, materials, labor, and how much furniture needs to be moved.  Other considerations are whether painters need to patch or repair damaged drywall, and if the home has cathedral or vaulted ceilings, which are much more difficult to paint than standard 9-foot-tall ceilings and could push painting costs much higher.


When Does Painting Qualify as a Capital Improvement? 

According to the Internal Revenue Service, painting may qualify as a capital improvement if it’s part of large-scale improvements to a rental property.  Painting by itself, however, is generally not considered a capital improvement.

Here’s an example: Your rental property needs some serious TLC.  You incur substantial costs to replace the roof and install new aluminum gutters.  During the improvement process, you also install all new energy-efficient windows and spend money upgrading the furnace and air conditioning unit.  You also had the residence painted inside and out.



These improvements are general restoration upgrades that replace major components of the property and therefore are considered capital improvements.  They can be depreciated over a 27.5-year timespan using the straight-line depreciation method.  If all those components of your rental property are in decent shape, though, and you just want to paint the residence, then the cost of painting generally isn’t considered a capital improvement under IRS capitalization rules – although it is a deductible repair expense.

The IRS will promote a repair to a capital improvement in three ways, these include:

betterment, such as adding on a room or curing a defect: In one example from the IRS, if you live in an area prone to earthquakes and install expansion bolts to anchor a building frame to its foundation, that’s a betterment.  It provides structural support.

restoration: such as any costs to restore a property to its original state after a loss or damage, such as a fire.

An adaptation, i.e., any cost of converting a property to a different use: If you remodel a residence to use it as a rental, that’s an adaptation.  Likewise, if you install a wheelchair ramp or wider doorways — or renovate the bathroom to accommodate a disability — those are adaptations and capital improvements.


The Bottom Line 

Painting a rental property is generally considered a repair expense much like replacing a damaged door, leaky faucet, or broken window.  However, if new paint is part of large-scale improvements to the residence, it likely will qualify as a capital expense.  Consult with an experienced tax professional to discuss your particular situation so you understand the tax treatment of costs incurred from painting your rental property.


Contact us

Productive painting offers professional power washing and residential, commercial, and industrial interior and exterior painting services to the communities of Wall, NJ and throughout Monmouth County, NJ.  Fully licensed and insured, Productive Painting Company is owner operated NJ LICENSE #13VH04439800.  Hours of operation Mon to Fri 8 AM to 5 PM and Saturday 8 AM to 1 PM.  Closed Sundays.

Productive Painting Call Now: (877) 298-9688

Monmouth County Exterior House Painting