Capital Improvements are work done to a home that increases its market value and that a future buyer would be willing to pay extra for.
At the resale of a Shared Equity Home with Champlain Housing Trust, the homeowner retains 100% of any market value that is added by capital improvements* and 25% of any additional appreciation.
When an appraisal is ordered to determine the current value of a CHT home, the homeowner should prepare a list of improvements that have been done to the home. The appraiser will use this list to isolate the value that has been added by making these improvements. This value is called Capital Improvement Credit.
Capital Improvement Credit is not granted for routine maintenance, repairs or normal replacement of items.
Major Capital Improvement Notification
Prior to undertaking construction or modification of the home which will cost more than $10,000, the homeowner must first speak with CHT regarding this construction or modification. If the homeowner does not speak to CHT prior to the Major Capital Improvement, CHT has the right to deny Credit for this Major Capital Improvement.
A notification form is available for this purpose. Please see the full Capital Improvement Policy for additional information.
|Is a Capital Improvement:||Is NOT a Capital Improvement:|
|Replacing wall to wall carpet with hardwood flooring||Replacing wall to wall carpet with new carpet|
|Adding a new garage to a home||Replacing an existing garage door|
|Finishing a basement||A fresh coat of paint|
|Completely remodeling a kitchen||Replacing appliances|
|Adding a fireplace||Repairing/replacing an existing heating system|
|Putting on a deck||Replacing windows|
|Adding a bedroom or bathroom||Replacing wiring or plumbing|
Once it has been determined that there is a capital improvement, the appraiser will determine what value that improvement adds to the home. This is NOT the cost of the improvement. This is the difference in the market value of the home with the improvement and without the improvement. So, for example, while it might cost $15,000 to add the new garage onto the home, having a garage may only add $10,000 to the market value of the home. Therefore, the seller will receive $10,000 in a Capital Improvement Credit. Capital Improvement Credits are given based on the increase in market value to the property due to the work regardless of the cost of the project.
*CHT may limit the amount of Capital Improvement Credit based on the Capital Improvement Policy.