It pays right now to go green. The American Recovery and Reinvestment Act of 2009, the same legislation that established the $8,000 home buyer tax credit, also established a number of tax breaks for current homeowners who want to improve their home's energy efficiency.
The Residential Energy Property Credit increases the energy tax credit for homeowners who make certain energy-efficient improvements to their existing homes, in many cases giving the homeowner a credit of up to 30 percent of the cost of the project. Most of the improvements must be made from January 1, 2009 through December 31, 2010, but some projects will be eligible for a tax credit through 2016.
"In addition to the $8,000 home buyer tax credit, these are additional tax breaks that will help consumers stimulate the economy and reinforce the value of going green," Julia Truesdale Keady, president of the Silicon Valley Association of REALTORS® (SILVAR). The SILVAR office in Cupertino is certified as a Green Business through the Green Business Certification Program administered by the Association of Bay Area Government (ABAG) and Santa Clara County.
Many energy-efficient improvements to existing homes now qualify for a tax credit of 30 percent of the project cost, up to $1,500. Examples of some projects include sealing up their home with new windows, doors, insulation and roofing. Exterior windows, skylights and doors with a qualifying U-Factor (which measures how well it insulates) and Solar Heat Gain Coefficient (which measures how well it blocks heat caused by sunlight) are eligible, as are certain metal and asphalt roofs. In addition, the credit covers installation costs for HVAC, gas, oil and propane water heaters and biomass stoves.
Owners who enhance their home with geothermal heat pumps, solar energy systems or small wind energy systems get an even bigger break. They qualify for 30 percent of the entire cost – including installation – and the credit doesn't expire until December 31, 2016.
Energy Star, an Environmental Protection Agency program that promotes efficiency, estimates that a knowledgeable homeowner or skilled contractor can save a family up to 20 percent on heating and cooling costs by sealing and insulating properly.
Keady said homeowners should be wary when considering products or services advertised as being "energy efficient."
"Homeowners are anxious to find ways to conserve energy and save money, and it is important to thoroughly evaluate a product or service to determine which is best for your particular situation," Keady said.
For detailed information about all eligible projects, visit www.energystar.gov/taxcredits.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.