It's tough right now affording any major remodeling, but we'd like to redo the kitchen and a half-bathroom in our San Antonia home. I've been reading about tax breaks this year for doing remodeling with materials that save energy. Is that for windows? Can you tell me more about the tax breaks and which kind of remodeling is covered?
Jim K. ~ San Antonio, Texas
Jim, taking advantage of the available tax credits for energy efficient home improvements may help offset the costs of your kitchen renovation and bathroom remodel. The federal government has made these tax credits available to homeowners as an incentive to make their homes more energy efficient and as a way to help the deflated construction sector of the economy during our current economic downturn. Many of the qualifying home improvements may also help your home feel more comfortable and may help to reduce the energy consumption of your home, which can save you money in the long run by lowering your monthly utility bills.
Like most tax credits, there are very specific rules and regulations that dictate what qualifies for the credit, and I always urge homeowners to consult with a tax specialist before making any purchases based on the expectation of a tax break. In general, the Existing Home Retrofit Tax Credit, as the federal bill is known, allows homeowners to apply for a tax credit of up to $1500 for the purchase and installation of home insulation, energy efficient windows, certain heat-reflecting roofing materials, and many high efficiency HVAC units.
Many professional contractors and material suppliers are well versed on these tax incentives, as their businesses are positively effected by homeowners who complete the energy efficient upgrades and apply for the tax credit. Before choosing what improvements to add to your home, I suggest you talk to some professionals in their areas of expertise and find the best way to incorporate these energy efficient upgrades into your remodel, allowing you to take full advantage of this tax credit.