Home Improvements

With a married couple, the personal residence (home) exemption is unlimited in value. So you can feel free to pour money into repairs OR upgrades without worrying about it being deemed a penalty-causing gift. After all, if you so desired you could sell your home and buy a million-dollar mansion, and that new home would be 100% exempt. So clearly an upgrade to your existing home will not generate any penalties.

Note that for a single (unmarried) person applying for Medicaid, there is indeed an upper limit of the value of the home’s equity that can be exempt for Medicaid eligibility purposes: $543,000, and in some states as high as $814,000.