Keep every invoice: how renovations and improvements reduce your tax when you sell

Let me give you a piece of advice that is genuinely worth money: keep the invoices for everything you invest in your home. When you sell, you are taxed on the gain, which is the difference between the sale value and the acquisition value. And it turns out that this acquisition value is not just what you paid for the house: it also goes up with the investments and improvements you have made. No invoice, no proof; and without proof, you pay more.

An improvement is not the same as a repair

Here is the nuance that decides everything. Only investments and improvements — those that extend the house, enhance it, or increase its value or its useful life — add to the acquisition value. Simple maintenance or repairs do not count: replacing something broken with an equivalent, or repainting, does not increase the acquisition value for tax purposes.

• Usually treated as an improvement or investment: an extension, enclosing a porch, a new installation (heating, swimming pool), an energy-efficiency upgrade.
• Usually treated as upkeep or repair (does not add): painting, fixing a fault, replacing worn elements with similar ones.
• The boundary is not always obvious and depends on the case, so it is worth analysing each invoice with judgement.

Why the invoice matters so much

For the tax authorities to accept an improvement as a higher acquisition value, you need to be able to prove it. And the proof is the invoice: in your name, with a breakdown of the work carried out and, ideally, with payment made in a traceable way (bank transfer, not cash). An incomplete invoice, one in someone else's name, or one paid in cash with no trace, is an invoice that may be of no use to you just when you need it most.

The non-resident who renovated years ago

The case I see most often: someone renovated their coastal home ten or fifteen years ago, kept almost nothing, and now that they are selling they discover that the investment could have saved them tax… if only they could prove it. Reconstructing the evidence after the fact is difficult and not always possible. So, if you are still the owner, start organising and keeping the documentation today, not on the day of the sale.

If you are going to sell — or you are thinking of doing so in a few years — write to me and we will review which invoices and investments can reduce your gain, and how to document them properly. It is one of those things that, done in time, translates into real savings when the moment to pay arrives.