Capital Improvement

Written By:
Paul Tracy
Updated August 5, 2020

What is Capital Improvement?

In general, a capital improvement is a one-time expenditure for physical assets such as buildings, land, construction, landscaping or major equipment.

How Does Capital Improvement Work?

Let's say Town XYZ wants to refurbish ABC Elementary School. It intends to pursue several capital improvements: Build a new wing for the fifth-graders, replace the playground, install better security systems, and redo all the plumbing.

Why Does Capital Improvement Matter?

This term usually refers to government or municipal projects. Often, the goal is to improve the quality of life in the town, attract more tax-paying business and comply with new building codes or laws.