Green home improvements have been encouraged in recent years through the offering of tax incentives. For people interested in making their homes more energy efficient and gaining the tax benefits at the same time, here are some tips to help you understand what types of green home improvements qualify for a tax credit and how to make sure you don’t miss out on the opportunity to earn your benefit.
Some green home tax credits are expiring at the end of 2010. Although we are approaching year-end, there is still time to take advantage of some of these money-saving incentives for energy-saving home improvements, but you must hurry.
Tax credits are offered on a wide range of green home improvements and upgrades. Some are very inexpensive to do; other can be quite costly even with the tax credit. Here is a summary of what is available for 2010.
The simplest and least expensive energy-saving home improvement that qualifies is adding insulation. Insulation for your attic can be purchased for no more than $50 to $100, and if you install it yourself (which is fairly easy and straightforward to do) there is no additional cost. This will earn you a tax credit of 30% of the cost.
For more expensive investments, tax credits of 30% of the cost, up to a maximum credit of $1500, are available now for the purchase and installation energy efficient furnaces and air conditioning units, energy efficient windows and doors, and water heaters. The credit includes the cost of materials and also the cost of installation for all these items except for the installation on doors and windows (don’t ask me why windows and doors are excluded; it makes no sense, but that is the law).
It is important to remember that these tax credits apply only to your primary residence. Second homes and rental homes and apartments do not qualify for the items listed above.
But I have saved the best part for last. There are even better tax benefits available for rooftop solar panel arrays, small residential wind turbines, and geothermal heat pump systems. For these specific green home improvements, the tax credit covers 30% of all costs, including installation without any upper limit. Even better, for these specific energy-saving investments the tax benefits can be claimed for your primary residence and second homes. Unlike the previous cases, new constructions are also okay. And get this: these government-provided subsidies are not expiring at the end of 2010. Tax credits for solar panels, wind turbines, and geothermal heat pumps are available through the year 2016.