Everything You Need to Know About Pool Taxes

Over 10 million households have swimming pools, and it’s easy to understand why. Swimming pools provide additional recreation and can help people with medical conditions become more mobile. 

While it can be exciting to get a pool, the sticker shock from the pool’s installation and corresponding pool taxes can be surprising. If you are wondering how you can write off your pool, you have come to the right place. This article will outline what’s required to save on pool taxes and how to figure out how much you’ll have to pay.

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Table of contents

• What are pool taxes?

• Who pays for pool taxes?

• How are pool taxes calculated?

• Who qualifies for medical prescription swimming pool tax deductions?

• How do medical prescription swimming pool tax deductions work?

• Can you write off pool maintenance on taxes?

• Ways to lower your pool tax bill or obtain pool tax deductions

• FAQs

  • Can you write off a pool on your taxes?

  • Is a pool considered a home improvement for taxes?

  • Does a pool increase property taxes?

  • Is pool maintenance tax deductible?

  • Does an inground pool increase property taxes?

What are pool taxes?

Pool taxes are an extra expense for homeowners with swimming pools on their property. Pools increase your taxes because they increase your property’s value, resulting in an increase in your property taxes. An inground pool increases your property’s value, but an above-ground swimming pool does not increase your property’s value or taxes.

Above-ground pools are not permanent additions to a property because they can be easily transported to another location. Inground swimming pools do not have that same luxury and are treated as a part of the property for taxing purposes.

Local regulations shed more light on pool taxes and ways to save. It’s possible to qualify for tax deductions on your pool if it helps with a medical need.

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Who pays for pool taxes?

Pool taxes fall on homeowners who have swimming pools installed on their properties. Condo owners may also have to pay pool taxes through mandatory homeowners’ association (HOA) fees. 

How are pool taxes calculated?

Knowing how pool taxes are calculated can help you decide on the right pool for your home. If you already have a pool, this calculation can help you plan your budget accordingly.

1. Size of the pool

A larger pool increases the value of your home. Each state has different rules governing how much each square foot adds to your taxes. You can save on taxes by opting for a smaller pool or getting an above-ground pool.

2. Age and features of the pool

As a pool gets older, it may become less valuable to a home if it has gone through wear and tear. The condition of your pool is one of the many factors that influence your tax bill. Another factor is the features you have in place. Homeowners can expect higher taxes if they have a hot tub or waterfall installed with the pool.

3. Local regulations

Local regulations impact your pool tax, and it’s good to look at your town or state’s rules before getting a pool. If you already have an inground pool, you can review these regulations to estimate how much you will owe in taxes.

4. Fair market value

Adding an inground pool to your home increases its value and results in higher property taxes. However, the same rule also applies to renovations. If you revamp your pool, your home will become more valuable and incur higher property taxes.

Who qualifies for medical prescription swimming pool tax deductions?

If you use a pool for medical purposes, the installation and operating expenses can qualify as tax deductions. Medical prescription swimming pool tax deductions are reserved for people who primarily use the pool for medical purposes. Homeowners who use the pool for social gatherings and recreation cannot qualify for the deduction. 

Here are some of the medical conditions that can result in tax deductions:

• Multiple sclerosis

• Chronic pain

• Physical therapy

• Arthritis

• Osteoporosis 

You should get a doctor’s recommendation to add a pool to your home to address a disease or your body’s functionality. You should also consult with your doctor as well as tax advisor to understand if you could qualify for medical prescription swimming pool tax deductions.

How do medical prescription swimming pool tax deductions work?

Tax filers can use Form 1040 to deduct installation costs that exceed the property’s heightened value and the pool’s ongoing operating expenses. If a pool costs $30,000 to install and increases your home’s value by $10,000, you can use a $20,000 tax deduction. Keeping track of operating expenses and presenting receipts can help you take a larger tax deduction.

Can you write off pool maintenance on taxes?

You can only write off pool maintenance if you primarily use the pool for medical purposes. It can’t be a pool that you use for medical purposes and plenty of recreation. Other members of the family should rarely go into the pool for it to be considered a tax deduction.

Ways to lower your pool tax bill or obtain pool tax deductions

Homeowners with swimming pools have a great asset that increases their home’s value when it’s time to sell. A pool can also provide fond memories, but your taxes will go up. Applying these strategies can minimize the burden of tax season so you can spend more time enjoying your pool.

• Opt for a smaller pool or an above-ground pool if you haven’t installed it yet.

• Contribute to a traditional retirement account.

• Take advantage of tax credits.

• Track your deductibles from your business or side hustle.

• Sell assets at a loss at the end of the year. You can re-enter those positions after 30 days to avoid the wash sale rule.

• Donate to a charity.

• Use your home office as a deductible.

It’s Hard to Save on a Pool

A pool will increase your home’s value and result in higher taxes. You can save money by using an above-ground pool instead or by installing a pool for qualifying medical purposes. However, it’s not possible to claim tax deductions on a pool that you use for recreational purposes. Homeowners with recreational inground pools should look for other ways to trim their tax bills.

FAQs

Can you write off a pool on your taxes?

You can only write off a pool on your taxes if it is used for medical purposes.

Is a pool considered a home improvement for taxes?

An inground pool is considered a home improvement for taxes. Above-ground pools are not considered home improvements for taxes because they are not treated as permanent additions.

Does a pool increase property taxes?

An inground pool will increase property taxes because it increases the value of your home.

Is pool maintenance tax deductible?

Generally no, pool maintenance is generally not tax deductible for personal residential pools. There may be some exceptions for swimming pool tax deductions, but you’ll need to check with your tax advisor to find out if you qualify for any.

Does an inground pool increase property taxes?

Installing an in-ground pool may increase your property taxes since it could be considered an improvement that adds value to your home. You’ll want to check with a tax advisor to learn the specifics on your situation.