Plumbing Deductions for Landlords: Repairs vs. Improvements

Posted on December 1st, 2025.

Being a landlord often means juggling maintenance requests, planning upgrades, and keeping an eye on tax season. Plumbing work can be one of the larger recurring costs, so understanding how those expenses affect your taxes is worth your time. The way you label each project, as a repair or an improvement, can change how and when you get tax relief.

Some jobs are quick fixes, like stopping a leak or clearing a clogged drain. Others are bigger projects, such as replacing outdated piping or modernizing a bathroom. For landlord plumbing deductions, the key is knowing which costs can come off your taxable income right away and which must be spread over several years through depreciation.

Once you understand how plumbing repairs vs. improvements are treated for tax purposes, it becomes easier to plan maintenance, schedule upgrades, and budget for the long term. You can also speak more confidently with your tax professional, since you will know how each type of work fits into your overall rental property strategy.

Decoding Plumbing Repairs and Improvements

Plumbing repairs are generally the routine fixes that keep a rental unit in safe, working condition. They restore things to the way they were before something broke or wore out, but they do not significantly extend the life of the system or increase the property’s value. Common examples include patching a leaking pipe, tightening a loose connection, or replacing a worn faucet cartridge. These jobs are usually smaller in scope and are aimed at keeping tenants comfortable and your property compliant.

From a tax perspective, repairs are typically treated as current expenses. That means you can usually deduct them in the same year you pay for the work, which directly reduces your rental income for that year. For landlords who deal with regular plumbing issues, these repair deductions can add up. They can help offset rent that might be temporarily reduced while a problem is being addressed. Keeping detailed records and invoices makes it easier for your accountant to back up these deductions if questions ever arise.

Improvements, on the other hand, are bigger projects that enhance the property. They might increase its value, adapt it for a different use, or extend the useful life of the plumbing system. Replacing old galvanized pipes with new copper or PEX throughout an entire unit is a strong example. Adding a new bathroom or relocating plumbing during a layout change also falls into this category. These projects typically require more planning, more materials, and more time on-site.

Because improvements are seen as long-term investments, they are not deducted all at once. Instead, the cost is added to the property’s basis and recovered slowly through depreciation. In practice, this means you spread the deduction over several years, reflecting the idea that the benefit of the project lasts well beyond the current tax year. While that can feel less satisfying in the short term, it can improve your tax picture over the life of the property, especially if you own it for many years.

In day-to-day terms, the line between repairs and improvements can sometimes feel blurry. For example, replacing a single failed section of pipe is usually a repair, while replacing an entire run of plumbing is more likely to be an improvement. If the work simply restores normal service, it leans toward repair status. If it leaves the property better than it was before in a lasting way, it likely counts as an improvement.

Getting comfortable with this distinction helps you organize your paperwork and communicate correctly with your tax advisor. When you describe projects, focus on their purpose and scope. Ask yourself whether the job just fixed a problem or meaningfully upgraded the property. That simple question often points you in the right direction before you attach a label to your tax records.

IRS Guidelines on Plumbing

The IRS draws a clear conceptual line between repairs and improvements, even though the details can be complex. Repairs are generally defined as amounts paid to keep property in ordinary efficient operating condition. They correct wear and tear or damage without materially adding value or prolonging the asset’s life. For plumbing, that often includes tasks such as repairing a leak, clearing a blockage, or swapping out a failing fixture with a similar one.

Because repairs maintain the status quo, they are usually deductible in the year they occur. That immediate deduction can be helpful if you have had a costly season with multiple service calls. It lowers your taxable rental income and keeps your records aligned with the reality of running the property. Many landlords rely on this treatment for ongoing maintenance that keeps units safe and habitable.

Improvements, by contrast, are governed by capitalization rules. They generally fall into categories such as betterments, restorations, or adaptations. Plumbing work that substantially improves water pressure throughout a building, replaces major components, or supports a new use of the space often meets these tests. A full re-pipe, for example, would typically be treated as an improvement rather than a repair.

Under IRS rules, the cost of these improvements is not taken all at once. Instead, it is capitalized and then depreciated over a set recovery period based on the type of property. For residential rentals, that often means a long schedule. Although you do not get an immediate full deduction, you gain a steady stream of depreciation expense that reduces taxable income in later years. This treatment matches the long-term benefit of the project.

There are also safe harbor rules and elections that may affect how you categorize certain plumbing costs, especially smaller projects. For example, the de minimis safe harbor or routine maintenance safe harbor can sometimes allow immediate expensing of work that might otherwise fall into a gray area. These rules have specific dollar limits and conditions, so it is wise to review them with a tax professional before applying them.

Because IRS guidance can change and individual situations differ, professional advice is essential. A tax advisor who understands rental properties can help you classify plumbing deductions for landlords correctly and avoid common missteps. Clear invoices from your plumber that describe the work done will support that advice and make the year-end review smoother.

Remodeling and Its Impact on Deductions

When you move from simple fixes into full remodeling projects, you are almost always dealing with improvements. A complete bathroom remodel that replaces older fixtures, reconfigures plumbing lines, and upgrades finishes is a classic example of a capital improvement. The same is true for a kitchen overhaul that includes new plumbing for sinks, dishwashers, or relocated appliances. These projects change how the space looks and functions in a lasting way.

From a tax standpoint, remodels typically increase your property’s cost basis. Instead of deducting the entire amount in the year you pay for the work, you add the cost to the building and recover it through depreciation. This can be valuable when you eventually sell, because a higher basis can reduce your taxable gain. The tradeoff is that you do not get a large one-time deduction for the entire remodel in the current year.

Understanding how a remodel affects basis can shape your planning. If you know that a major bathroom upgrade will be capitalized, you might time it alongside other improvements or plan it in phases. You may also decide to complete a series of smaller repair projects before or after the remodel that do qualify as current expenses. Coordinating with your tax professional before work begins can help you weigh different options.

Remodels often include both clearly capital items and smaller repair-like elements. For example, during a full bathroom renovation, you might repair a small section of existing pipe while also installing new lines and fixtures. In some cases, work that would be a repair on its own can be treated as part of the overall improvement when it is bundled into one project. This is one reason detailed documentation and professional guidance matter.

It is also important to think about how remodels affect your rental strategy. A fresh, modern bathroom or kitchen can justify higher rent, attract better tenants, and reduce vacancy. While those benefits are not directly part of your plumbing tax deductions, they matter when you evaluate the return on your investment. A project that improves tenant satisfaction and reduces future complaints can pay off in ways that go beyond the tax schedule.

Ultimately, distinguishing between repairs and improvements during a remodel comes down to intent, scope, and lasting impact. If the work simply restores existing features to good condition, it leans toward repair treatment. If it renews or upgrades the space in a meaningful way, it likely counts as an improvement. Keeping that framework in mind as you plan projects helps you make decisions that support both your properties and your long-term finances.

Related: Repair or Replace? When to Get a New Garbage Disposal

Turn Plumbing Projects Into Tax-Smart Decisions

Plumbing work in rental properties will never be completely avoidable, but it can be managed in a way that supports your financial goals. When you understand how repairs, improvements, and remodels affect your deductions, every service call and project becomes part of a bigger plan instead of a surprise expense.

At Choice Plumbing, Inc., we take that bigger picture seriously. We focus on clear communication, detailed documentation, and quality work so your plumber’s invoice actually helps your tax professional do their job. Whether you need a quick repair, system upgrades, or plumbing support for a full remodel, we are ready to help you protect both your property and your budget.

Ready to craft spaces that showcase both luxury and high returns? Don't just renovate—invest in your home’s future value. Start 2026 with the kitchen or bathroom you’ve always wanted. Get a Free Remodel Estimate!

Feel free to give us a call at (916) 879-1300 to explore how we can assist with these transformations most beneficially. Let's partner in creating thriving living spaces together.