Maaser Money for Hiddur Mitzvah

Hi all,

I once remember hearing that while one cannot use maaser money for purchasing his own tefillin / mezuzos, one can use maaser for the extra cost between a basic kosher and mehudar product, ie if basic kosher tefillin cost $300 and one buys a mehudar pair for $1000, one can use / deduct $700 from maaser funds.

1) Can anyone who looked into this confirm if this is correct
2) If it is, a source / sources would be appreciated.

Thank You


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