How to Deduct Landscaping in Arizona

For tax purposes in Arizona, a home improvement consists of any work carried out that significantly increases the value of your home, enhances its useful life, or adjusts it to new uses. These home improvements include room additions, fencing, wiring upgrades, kitchen upgrades, walkways, new roofs, plumbing upgrades and landscaping, among others.

Of all the home improvements that have tax benefits in Arizona, landscaping is the most complex. Unless you run a business from your home and can justify the expenditure as a business expense, you can’t just put your landscaping costs down as a deduction.

What Does IRS Allow for Land Improvements?

The general IRS rules allow depreciation of items that improve the value of the land. While you may believe trees and shrubs add value (we do!), what the IRS actually has in mind are features like pools, underground irrigation systems and paved areas. Landscaping is not considered a land improvement in this sense.

The only way you can add landscaping to the value of your property is if the features are located close to your home, such that moving or replacing the home would destroy the landscaping. Hedges and such around the edge of your property: you’re out of luck.

The silver lining of not being able to add all landscaping to the tax value of your home? It will decrease the taxes you owe when you sell your home.