Certain types of home improvements can be used to offset capital gains when selling a property. Capital gains occur when you sell an asset for more than its original cost basis. To minimize the capital gains tax liability, homeowners can consider using eligible improvements that increase their property's adjusted cost basis. Examples include adding square footage to the living area, renovating bathrooms and kitchens, installing energy-efficient systems such as solar panels or geothermal heat pumps, or making significant structural upgrades like replacing the roof or windows. It's important to keep detailed records of these improvements along with their associated costs so that you can accurately determine the adjusted cost basis and potentially reduce your capital gains tax burden upon selling the property.