We are roofers, not tax professionals, but we’re from Detroit. One of our favorite hockey players was Pavel Datsyuk, nicknamed “The Magic Man.” He got this name because of his creative playmaking skills. So, not sending you a few assists regarding general guidance on possible tax benefits or siding tax deductions in Michigan or Detroit would be out of character.
Whether (and how) you can deduct siding expenses depends on several factors, primarily whether the siding is for a personal residence, a rental property, or a property that meets specific energy-efficiency guidelines.
Home Improvements vs. Repairs (Federal Tax Treatment)
Capital Improvement vs. Repair
Siding installation or replacement is typically considered a “capital improvement” rather than a repair, particularly if it increases the value of your home, prolongs its useful life, or adapts it to new uses.
Repairs (like patching a small hole or fixing a minor defect) are usually not tax-deductible for a personal residence.
Capital improvements are not immediately deductible on your federal income taxes for a primary residence. Instead, these costs generally become part of your home’s cost basis, which may reduce your capital gains tax if/when you sell the property.
Rental Properties or Business Use:
If the property is used for rental or business, improvements can typically be depreciated over time. You may deduct a portion of the siding cost each year according to the IRS’s depreciation schedule (often 27.5 years for residential real estate). You must keep detailed records and file using the appropriate tax forms (e.g., Schedule E for rentals).
Energy Efficiency Tax Credits
Federal Energy-Efficient Home Improvement Credit (formerly known as Nonbusiness Energy Property Credit)
You might qualify for a federal tax credit if you install siding with insulation that meets specific energy-efficiency criteria. However, typical vinyl or fiber-cement siding is often not eligible unless explicitly rated and marketed to reduce heat loss/gain to specific efficiency standards; check the most current IRS guidance (Form 5695 instructions).
Energy Audit Incentives:
Michigan occasionally offers incentives or rebates for energy-saving home improvements. These are often administered through utilities (e.g., DTE Energy) or state programs. While not a “tax deduction” per se, these rebates can reduce your net out-of-pocket expense. You can check the DTE Energy or Consumers Energy websites or use the Database of State Incentives for Renewables & Efficiency (DSIRE) to see what might apply in Detroit.
Local Detroit Property Tax Considerations
Property Tax Assessments
Significant improvements, such as new siding, may raise your home’s assessed value, affecting your property taxes in Detroit. However, Detroit sometimes offers programs or abatements (like the Neighborhood Enterprise Zone (NEZ) program) that can reduce property taxes in specific revitalized neighborhoods.
NEZ
If you live in an NEZ or are part of another Detroit-specific incentive program, you might qualify for reduced property tax rates on the improvements. You must contact the City of Detroit’s Assessor’s Office or the City of Detroit website for details on local incentives.
Historic Districts
If Detroit homeowners live in a designated historic district, specific guidelines regarding siding materials might exist. Sometimes, tax incentives or grants are available to help homeowners maintain historically appropriate façades. However, this varies widely, so contact the Detroit Historic District Commission to see if additional incentives or requirements exist.
Recordkeeping & Documentation
If you do pursue any available credit or plan to adjust your home’s cost basis for future capital gains, keep all documentation related to the siding project: invoices and receipts for materials and labor, manufacturer’s certifications (if claiming energy efficiency), any city permits or historic district approvals. Good records ensure you have what you need if you file for credit or if questions arise during a future sale or audit.
Professional Advice
Lastly, because tax laws and incentives change frequently, it’s always wise to Consult a tax professional (CPA, licensed tax preparer, or attorney) for personalized guidance. Visit the IRS website for the latest publications (especially Form 5695 for energy credits) and instructions. Check the State of Michigan Treasury and the City of Detroit websites for any local guidance or programs that might apply.
Property tax exemption Detroit homeowners
If you’re a Detroit homeowner struggling with property taxes, the city offers several programs to provide relief and help you stay home.
Homeowners Property Exemption (HOPE program): The HOPE program offers eligible homeowners a reduction or complete property tax exemption from current-year property taxes based on household income and circumstances. You must own and occupy your home as your primary residence to qualify. The exemption levels range from 10% to 100%, depending on your household income and size. For example, in 2025, a single-person household earning up to $20,783 may qualify for a full tax exemption.
Applications are accepted annually, with the 2025 deadline of November 7, 2025. You can apply online or seek assistance from community partners.
Pay As You Stay (PAYS): Once approved for the HOPE program, you become eligible for PAYS, which reduces delinquent property taxes. This program limits the balance of unpaid taxes to a percentage of your home’s taxable value or removes interest, fees, and penalties, making it more manageable to pay off your tax debt. The remaining balance can be paid over three years at zero percent interest.
Detroit Tax Relief Fund (DTRF): Administered by Wayne Metro, the DTRF aims to eliminate remaining delinquent property taxes for Detroit homeowners approved for both HOPE and PAYS. This initiative ensures qualifying residents can have their property tax debts completely forgiven, providing a fresh start. To begin the process, contact Wayne Metro at (313) 244-0274 or visit their website to schedule an appointment.
By participating in these programs, most homeowners can significantly reduce or even eliminate their property tax burdens, helping to secure their homes and financial futures. Be sure to review all of our other recent tax-related content. You may learn about different programs to help you find nonprofit partners that can help you save on taxes and energy bills.
Between your research, check out some magical passing highlights from #13, a newly elected inductee to the Hockey Hall of Fame.
