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For the most part, peel-and-stick wallpaper doesn't damage walls. However, there may be some cases when damage does occur. For example, if you try to rip the paper off the wall, you may pull away some paint at the same time.

The walls can also be damaged if they aren't prepared properly before you add the wallpaper. For example, if the coat of paint is too fresh when you put the wallpaper on the walls, it can peel away as you remove the paper. 

You can paint over wallpaper if it’s smooth and in good shape. But if there are bumps or tears in the wallpaper, they’ll likely show through the paint. Similarly, you should avoid painting over textured wallpaper because the ridges and patterns in the paper will be visible. In either of these situations, you should remove the wallpaper before painting.

The pros of wallpaper include its durability and longer lifespan than paint, as well as its versatility. The durability can translate to lower long-term costs for upkeep and replacement, and the versatility means you have more options for customizing rooms in your home. Some downsides include that it’s difficult to remove, it’s not ideal for rooms or areas exposed to high moisture content or sun exposure, and it’s tricky to install. A professional wallpaper hanger can help mitigate these issues, though, by installing it properly and in areas suitable for wallpaper.

It’s best to remove wallpaper rather than paint over it. You should only paint over wallpaper if removing it would damage the wall, the surface is relatively smooth, or there are minimal problem areas—such as slight peeling and lifted seams—that you can fix easily. Painting over wallpaper can save time, but it can create more problems if the wallpaper is in poor condition and you don’t properly prep the area for painting. Depending on the state of the wallpaper, color, and textures could show through, and moisture from the paint could loosen the adhesive, causing unsightly bubbling.