The Financial Benefits of a Home Security System

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financial benefits of a home security system

A monitored home security system can save you some serious money on your insurance premiums and taxes.

A very important but often overlooked benefit of a security system is that it can give you substantial savings on your insurance premiums and tax liability. In fact, it’s not unusual for savings in these areas to largely offset the cost of security system installation and monitoring.

Reduce Your Insurance Premiums

Insurance companies know that monitored security systems help prevent losses. In fact, a home with a security system is far less likely to be burglarized than a home without a system. So some insurance carriers offer discounts on insurance premiums when you install or upgrade a security system. Depending on the type of system installed, this can mean savings of 5% to 20% or even more on your premiums.

Reduce Your Tax Liability

A home security system is usually considered a “capital improvement” on a home. If you make such an improvement you can add the cost to your home’s adjusted cost basis at the time of sale. This reduces your capital gain and, therefore, your capital gains tax when you sell your home. By the way, security systems are very popular with new home buyers, which will make your home easier to sell.

At the same time, security system installation and monitoring fees are normally eligible for treatment as a deductible business expense. This is also true if you are running a business out of your home, for that portion of the system that is protecting the “business area.” See IRS Publication 529 and talk with your tax professional for advice concerning your particular situation.

To find out how you can put these kinds of cost savings to work for you while protecting your home or business at the same time, just contact us here at Key Witness Security for a free, no-obligation consultation.

Comments

  1. Simon Brooks  February 1, 2016

    Wow, I didn’t know that something as simple as adding a security system counted as a “capital improvement” on the home. I’ll have to think about upgrading the one at our house, especially if it means I can count it as a tax liability. I had always thought that the safety they bring to a home was the main benefit, but it is nice to know that you can save some money as well.

    reply
    • Bryan Branz  February 2, 2016

      Thank you, Simon, for your comment. This article was posted in order to inform consumers of some possible savings associated with investing in a security system. I can see that it accomplished just that. I would encourage all folks considering a security system as an investment to consult with both their insurance agent as well as their CPA to see how much money can actually be saved.

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  2. Paul Langley  March 30, 2016

    This is some really great information for anyone considering a home security system. I had never thought about how it would affect your home insurance premium, but it makes sense that the alarm system reduces risk of a break-in. And it’s awesome to know that it can even reduce your tax liability. Thanks so much for writing!

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  3. Donald Raggs  June 11, 2016

    If you’re considering investing in a home security system, keep in mind that a professional monitored system can help protect your family from a wealth of costly hazards including fire and flooding. Additionally, home security providers offer carbon monoxide monitoring that could help save your life.

    reply
    • Bryan Branz  June 13, 2016

      Thank you, Donald, for your insight. It is true that many home security providers are able to provide monitored systems that cover fire, flooding, and CO detection. Currently, Key Witness Security is limited to burglary detection only, using the latest in video verification technology to ensure that law enforcement gives top priority to any crime in progress on your property.

      reply

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