Home Records Every Owner Should Keep

By Georgina Patterson | Your Real Estate Connection

The Complete Guide

The Bottom Line

Organized homeowners save tens of thousands in taxes. A homeowner who spent $200,000 on documented improvements can reduce taxable gain by $200,000 when selling. At a 20% federal capital gains rate, that documentation alone could save $40,000 or more in tax.

Keep these records for the life of ownership — plus 7 years after sale.

PURCHASE & OWNERSHIP

Keep forever (or until 7 years after sale):

• Closing statement (HUD-1 or Closing Disclosure)

• Original purchase contract & amendments

• Title insurance policy & title report

• Deed & recording documents

• Property tax bills & payment proofs

• Annual property assessments & special assessments

• Mortgage statements (Form 1098)

• Refinance & HELOC documentation

CAPITAL IMPROVEMENTS (The Tax Game-Changer)

Keep for the entire time you own the home. These increase your tax basis and reduce capital gains when you sell.

Improvement Type

Room additions, ADUs, garage conversions 

Kitchen & bathroom remodels 

Structural: roof, foundation, HVAC 

Energy upgrades: solar, heat pumps

Outdoor: decks, patios, pools

Keep Records For

Permits, contracts, invoices

Contractor quotes, before/after photos

Installation invoices, warranties

Receipts, rebate forms

ENERGY & TAX CREDITS

Keep records + receipts for:

• Solar panel installation & permits

• Energy Star windows & doors

• Heat pump installation

• EV charging equipment

• Insulation & HVAC upgrades

WHAT HOMEOWNERS THROW AWAY (Big Mistake)

■ Remodel receipts

■ Building permits

■ Contractor invoices

■ Landscape improvement costs

■ Solar installation documentation

■ Warranty cards

These are your tax goldmine. Keep them.

THE STORAGE STRATEGY

Digital first:

• Scan all original documents

• Cloud backup (Google Drive, Dropbox, etc.)

• Organize by category & year

Original documents:

• Keep in a fireproof safe or safety deposit box

• At minimum: deed, title insurance, and major permits

Scenario: Homeowner buys for $800,000, invests $200,000 in documented improvements, and sells for $1.2M.

IF YOU RENT PART OF YOUR HOME OR USE IT FOR BUSINESS

Keep:

• Depreciation schedules

• Rental income & expense records

• Home office calculation worksheets

• Improvements made to the rental/business area

WHEN YOU SELL THE HOME

Keep for 7 years after closing:

• Listing agreement

• Seller closing statement & HUD-1

• Escrow settlement statement

• Real estate commission records

• Transfer tax documents

• Proof of sale price

Your Annual Tax-Saving Task

(Every December)

What You'll Receive

In December, your lender sends you a Form 1098 (Mortgage Interest Statement).

This shows the mortgage interest you paid that year.

What to Do

Provide to your Tax Professional:

1. Form 1098 (mortgage interest)

2. Property tax statements

3. Income tax information

Your Tax Professional will calculate:

• Mortgage interest deduction

• SALT deduction (up to $40,000 if under $600k income)

Keep your 1098 and property tax records. The SALT deduction cap just increased to $40,000 — combined with your mortgage interest deduction, you may have significant tax savings to discuss with your Tax Professional.

BOTTOM LINE CHECKLIST

■ Purchase documents filed & backed up

■ Every capital improvement documented with permits & invoices

■ Tax records organized by year

■ Digital backup system in place

■ Ready to hand to your tax preparer

■ Nothing thrown away until 7 years post-sale

REPAIRS VS. IMPROVEMENTS: KNOW THE DIFFERENCE

Keep receipts for both home repairs and improvements, but remember that they are treated differently for tax purposes. Routine repairs generally maintain your home’s condition, while qualifying capital improvements may increase your home’s tax basis and help reduce your taxable gain when you sell. Save all receipts, permits, invoices, and before-and-after photos, and confirm eligible expenses with your tax professional.

Georgina Patterson is a French-American real estate professional helping buyers and sellers in Sausalito, Marin County. With a background in tax preparation as an Enrolled Agent, she helps clients better understand both the lifestyle and financial side of homeownership. Georgina is fluent in both French and English, allowing her to effectively serve international clients.

Georgina Patterson Realtor®️, DRE #02104684

📞 415.342.6794

✉️ Georgina.Patterson@kw.com  

🌐 GeorginaTheHomeFinder.com

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