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Capital Improvements

Definition - What does Capital Improvements mean?

Capital improvements are additions to property that can cause the property to increase in value or lifespan. In the context of the law, capital improvements can cause the fair market value of the property to rise. This can affect appraisals which can in turn affect sale prices. There are many different types of capital improvements that can be made to a property.

Justipedia explains Capital Improvements

Sometimes, capital value is added by property owners out of necessity. Sometimes it is done as an investment in the home or property. For example, if a roof is damaged, a homeowner may have a brand new roof installed. However, a different homeowner may choose to upgrade his roof simply to add value to the house. Both situations would be examples of capital improvements. Local governments can add capital improvements to town property by adding attractive features such as parks or gazebos.

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