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Navigating Taxes in Louisiana: Remodel vs. New Build

January 12, 2024


As a Louisiana-based contractor, I frequently advise clients on the tax implications of their home improvement choices. In Louisiana, the decision to remodel your existing home or opt for a new build carries different tax consequences. Understanding these can be crucial for your budgeting and planning. Let’s discuss the tax aspects of remodeling versus new construction in the Pelican State.

Remodeling and Tax Implications in Louisiana

The Scope of Remodeling

Remodeling in Louisiana can range from minor updates to significant renovations. This might include kitchen remodels, bathroom updates, or adding an extension to your home.

Tax Considerations

  • Property Taxes: Generally, remodeling can increase the value of your home, potentially leading to an increase in property taxes. However, the hike in taxes is often less than what might result from a new build.
  • Sales Tax: Louisiana imposes sales tax on the materials used in the remodeling process. However, labor costs for residential construction work are exempt from state sales tax.
  • Tax Credits: In some areas, particularly historic districts, homeowners may be eligible for state or federal tax credits for renovations that preserve the historical nature of their properties.

New Construction and Tax Implications in Louisiana

Understanding New Construction

A new build involves constructing a new structure, either on a previously undeveloped property or by replacing an existing structure.

Tax Implications

  • Property Taxes: New constructions in Louisiana are likely to lead to a significant increase in property taxes, given the addition of a new structure to your property.
  • Sales Tax: The materials used in new constructions are subject to state sales tax. Unlike remodeling, where labor costs are often exempt, new construction can attract sales tax on both materials and labor.
  • Capital Gains: If you’re building a new property as an investment, you might face capital gains tax when you sell, depending on how long you own the property and other factors.

Making the Right Decision

Evaluating Your Needs

  • Consider whether remodeling your current home will meet your needs, or if building a new one is a more viable option.
  • Factor in not just the upfront costs but also the long-term tax implications of your choice.

Consulting with Experts

  • It's advisable to consult with a tax professional who can provide detailed advice based on your specific situation.
  • As a contractor, I can guide you through the cost estimates and practical aspects of your project, but for tax advice, a specialized expert is your best resource.


At HoneyB Construction, we want to emphasize the importance of understanding the distinct tax implications when deciding to remodel your existing home or undertake a new build in Louisiana. This insight is vital for making an informed decision that is in harmony with your financial objectives and home improvement aspirations. We strongly advise seeking professional guidance to effectively navigate these complex choices. Should you have any questions or require further information, please feel free to reach out to us at HoneyB Construction. We are committed to assisting you in every step of your home improvement journey.

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