Capital Improvement

A capital improvement refers to a permanent structural addition or modification to the interior, exterior or landscape of a property that will improve its quality. Any addition or modification that adds significant value to the property, prolongs its useful life and becomes permanently affixed in a way that removal would cause substantial damage to the property is considered a capital improvement. Such improvements would include roofs replacements and installments of decks, light fixtures, in-ground pools, privacy fences, outdoor sheds, paved driveways, new windows and doors, and burglar alarms just to name a few. Capital improvements are often confused with typical maintenance and repair projects that cannot be capitalized. Some regular maintenance projects that should not be confused with capital improvement projects might include roof repairs, painting, vinyl siding repairs, and plumbing repairs. Appliances such as refrigerators, stoves, and dishwashers are also not considered capital improvements since they do not become permanent fixtures and can easily be removed and replaced without causing structural damage to the property. Capital improvements can also be made on a municipal level when the local governments invest in building new parks, schools, shopping districts and overall landscaping of a city region — all of which improves the overall value and usefulness of the city’s public facilities.