While the housing market has certainly seen better days, one thing is clear: home buyers are being more discriminating than ever and want to get the most bang for their buck. One of the few bright spots in the building industry is high-performance and green building. Buyers want homes that will save them money on utility bills, require less money to maintain and have better indoor air quality.
Thanks to federal and state tax credits, there has never been a better time to build a new home or remodel an existing home to high energy efficiency standards. Knowing these tax breaks allows for more informed budgetary decisions.
Home builders can apply for a $2,000 federal tax credit for each energy-efficient home completed after 2005 and sold in 2009 that reduces its energy consumption for heating and cooling by 50 percent when compared to the 2004 International Energy Conservation Code (IECC). To qualify for the tax credit, building envelope improvements in areas such as insulation, exterior doors and pigmented metal roofs must account for 1/5 of the energy savings in each new home.
Home builders must document the energy savings by using a third-party Residential Energy Services network (RESNET)-accredited inspector to certify and model the home with software approved by the IRS and RESNET. EarthCraft House performs both of these services and can provide a tax credit recommendation report to assist builders in achieving the desired savings.
Home owners can received federal tax credits for improving an existing home’s building envelope, which includes insulation materials, exterior doors, windows, skylights, pigmented metal roofs, asphalt roofs and systems designed to reduce heat loss or gain. The combined total of these credits may not exceed ten percent of the costs or $500, with less than $200 dedicated to windows. Improvements should last a minimum of five years and must meet 2000 IECC criteria. Credits cannot compensate for installation costs.
Home owners can apply for federal tax credits for high-performance heating and cooling systems installed in new or existing homes, as well as federal and Georgia tax credits for clean energy resources. To collect credits for any heating, cooling or water heating equipment, home owners must make purchases during 2009 and meet the performance standards set for each technology. Home owners can collect credits totaling the entirety of any expenditure, without exceeding the following caps:
- Electric Heat Pump Water heaters – $300
- Electric Heat Pumps – $300
- Geothermal Heat Pumps – $2,000
- Central Air Conditioners – $300
- Natural Gas, Propane or Oil Water heaters – $300
- Natural Gas, Propane or Oil Furnace or Hot Water Boilers – $150
- Advanced Main Air Circulating Fans – $50
- Biomass Stoves – $300
Although clean energy resources vary by system, federal tax credits can cover up to 30 percent of installed costs, and Georgia tax credits can return up to 35 percent of costs. Both federal and state tax credits are subject to caps.
To claim state tax credits, a clean energy system must be placed in service between 2009 and 2012 and be operational or able to function as intended prior to proceeding with both the pre-application processes. Remember to keep clear and accurate records (including receipts, modeling reports and work details) to properly file for tax credits.
For more information about EarthCraft House, visit http://www.earthcrafthouse.com/.
Source: Atlanta Building News, 03/09
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