Home additions are generally not tax deductible in the year they are completed but can have significant tax implications when you sell your home. They are considered capital improvements, which increase your home's value and are added to your tax basis. This higher tax basis reduces your taxable gain when you sell, potentially lowering your capital gains tax. If part of your home is used for business or rental purposes, you can depreciate the cost of improvements over several years. Additionally, certain energy-efficient upgrades and medically necessary modifications may qualify for tax credits or deductions. Always keep detailed records and receipts of all home improvements for future tax purposes.