A good quality landscape adds beauty and value to a home or business. However, with time and use, a well-designed landscaping can become worn out or overgrown. If this occurs, the property owner may be able to capitalize the cost of a renovation as a capital improvement. Capitalizing these expenses can have tax advantages and improve financial reporting. The IRS imposes strict guidelines that need to be followed for this treatment to be effective, and it is always best to consult with an accountant or financial adviser to determine the appropriate accounting procedure.
A complete landscape overhaul can be a major capital project that will raise the value of a commercial or residential property for the long haul. Removing old, tired plantings and installing new ones can give a property a fresh, inviting appearance. Adding or upgrading hardscape areas like patios can also enhance a space. These types of enhancements are especially popular with businesses that want to encourage employees to take breaks or have informal meetings outside.
Many homeowners and businesses wonder whether or not a total landscape renovation is worth the investment. According to Angi, a home and garden expert at CBS News, it is if the landscaping will be attractive for years to come. In fact, it’s one of the top 10 remodeling projects that homeowners undertake each year.
The cost of a complete landscape renovation can be divided into several stages, which can help with budgeting. Creating a landscape design plan is a great way to begin the planning process. This includes identifying what kind of landscape features are most appealing, as well as choosing the best plants to complement your property’s existing architecture. Then, you can create a detailed list of all the materials that will be needed and estimate the price tag.
Once the landscaping is installed, it will need to be properly watered to ensure its health and longevity. The most efficient irrigation method is through drip systems, which minimize evaporation and reduce water waste. Using this type of system is also great for the environment, as it uses less water than traditional sprinklers.
Another essential aspect of capital landscaping is ensuring the proper placement of plants and trees. It is important to consider the future growth of the plant and its mature size, as this will determine where it should be located on the property. For example, a homeowner might decide to plant junipers around their house. These shrubs are extremely flammable and pose a fire risk in the western region. The homeowner can reduce the fire risk by placing these shrubs away from the house or by removing them.
A landscaper performing work that qualifies as a capital improvement should not charge sales tax on the project, if the customer provides them with a properly completed Form ST-124, Certificate of Capital Improvement. A landscaper should keep the certificate in their records to show why sales tax was not charged on the project. capital landscaping