Yes, countertops are a capital improvement because they’re a structural change of the property that will enhance the property’s overall value, prolong its life and can be adapted to different uses.
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What qualifies as Capital Improvement?
A capital improvement can be any alteration, addition, or renovation done to your property.
There are three conditions for one of these things to count towards capital improvement.
- The change to the property has to be something permanently affixed to the property that would cause material damage to the property if removed.
The capital improvement needs to be easily identifiable, something that the property has attached to it. So, for example, if you end up selling, you want to point to that capital improvement as a selling point.
- It has to be a permanent installation.
You can’t add something in and call it a capital improvement if you’re willing or planning to remove it if you move out down the line.
- It adds value to the property or prolongs the property’s lifespan.
If you buy a run-down house and completely renovate it, you’re substantially increasing the lifespan while creating capital improvements, further increasing the property’s value.
On the other hand, if over the years of living in your home, you replace things like the deck, countertops, floors, pool, etc., you’re also adding to the lifespan of your home and increasing its value through capital improvements.
What Counts Towards Capital Improvements?
This depends on the country, province/state to truly determine their definition of what counts towards a capital improvement.
Some places have different rules regarding how long the change has to exist before counting. For example, most don’t allow basic wear and tear repairs to count towards capital improvements. So you have to consider what counts towards basic repairs vs essential repairs when considering what will and will not count towards capital improvements.
It can qualify if the repair/renovation is necessary to keep the property in good condition and adds value. However, improvements like painting, fixing a step, fixing leaks, and similar repairs/renovations, are not considered. Renovating a kitchen, building a deck, and similar improvements do count towards capital improvements.
Is a Kitchen Countertop a Capital Improvement?
Yes. A countertop is considered a capital improvement.
Countertops are a capital improvement because they check all the boxes to count as a capital improvement.
- Countertops are permanently affixed changes to the property which would cause damage if removed, resulting in a need for replacement.
- Countertops are a permanent improvement that will remain with the property.
- Countertops add value and extend the lifespan of the property.
What Type of Countertop has the greatest capital improvement gain?
Granite is probably the best countertop material due to its retail price, strength, durability, and aesthetic values. However, you should keep in mind that granite countertops are expensive and can dull over time if misused.
What affects the capital improvement gain when it comes to countertop materials? Here are some things to consider;
- Value of the Countertop Material
This is an excellent determinant of capital improvement gain as the value of the material will be attributed to the increased value of the property.
Certain materials cost more than others. When you consider which countertop material to use for your renovation, keep in mind the house you’re renovating. Just because granite is an excellent material for capital improvement doesn’t mean you should add it to a home only worth $150,000.
If your house is high-end, in a good neighbourhood, prime real-estate, consider a worthy material like Granite, Marble, Quartz. If you live in an average neighbourhood, and your home isn’t exuberant consider laminate, concrete, butcher blocks, etc.
Don’t drive up the value of your property with expensive materials if the home and surroundings aren’t worth what the new market value will become. Lovely homes don’t mean much in bad places, so know what you’re renovating for so you don’t overextend the property value vs the market value.
- Durability and Maintenance of the Countertop Material
Consider the durability of the material you choose for the countertop. You want to consider how long a material will last, especially if you live in the house. Make sure to maintain these materials so that they can retain their value.
Granite, marble, soapstone, quartz are all expensive materials. You want to protect these investments as some are particularly susceptible to wear and tear, such as marble.
Protecting your countertop materials is different across the board, with all demanding slightly different processes. However, the common element to maintaining is sealing. Take maintenance seriously to prevent any extensive damage to the material and its value.
- Aesthetics of the Countertop Material
Some countertops look nicer than others. It’s a simple fact. We recommend being very careful when deciding on variations of certain materials. Don’t choose bombastic colours or strange laminate patterns, or gaudy tile choices. These decisions, regardless of their price, will affect the selling price in the long run.
Another element of aesthetics to consider is the installation. Make sure to have it done professionally. You don’t want the countertops badly installed with grout, in the case of tiles, or bubbles in the case of laminate, being visible. This hinders the value of the work in the long run.
While they may be capital investment gains at the time, you’ll find that buyers hate the decision you made and consciously purchase the house at a negotiated lower price. They know that they’ll renovate the countertops due to terrible material used, design choice, or shoddy installation.
