Another Tax Credit to Consider for Marin Home Owners & Marin County Home Buyer
In the current Marin Real Estate Market, the hot topics for housing bargains are usually Marin Short Sales, Marin Foreclosures, REO's (Real Estate Owned or Bank Owned), or the Homeowners Tax credit of up to $8,000 for new homebuyers and up to $6,500 for repeat Home buyers.
One sometimes forgotten way for new home buyers or existing homeowners to save is the available tax credit for making your home more energy efficient, usually by installing replacement windows or installing energy efficient heating and cooling systems. This is not only an immediate benefit but a savings for the life of the home on utility bills and will help with its resale value.
Here is an explanation from the IRS website:
"Residential Energy Property Credit (Section 1121): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010. The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as “energy efficient” for purposes of this tax credit. The IRS has issued guidance that will allow manufacturers to certify that their products meet these new standards.
Until the guidance is released, homeowners generally may continue to rely on manufacturers’ certifications that were provided under the old guidance. For exterior windows and skylights, homeowners may continue to rely on Energy Star labels in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards."
This is really a great option. Not only do you get a tax credit of up to $1,500 but you save on your energy bills from then on and know you are doing your part.
Keep in mind that the Act provides for a tax credit, rather than a tax deduction. A tax deduction simply eliminates a percentage of overall taxes owed by subtracting a sum before your tax liability is calculated. A tax credit, like the $1500 that the Recovery and Reinvestment Act provides will remove taxes dollar for dollar and is subtracted from your total tax liability after all calculations have been made. A tax credit will generally benefit a taxpayer three times the amount a deduction would.
In addition to the tax credit most window dealers are offering additional discounts to make the initial savings more attractive. Contact some installers and ask about thier incentives. After installation you can realize a 7 to 24% savings on your utility bills which over time will really add up. And you will be doing your part to save energy and reduce emissions!