A new law gives homeowners $8,000 to make these five home renovations

 

A new law gives homeowners $8,000 to make these five home renovations

Are you thinking of some home renovations for the summer? Approach your next remodeling project with an eye on sustainability. You can reduce your home's heating and cooling costs with a refund from the federal government.

The Inflation Reduction Act of 2022 provides more than $8,000 in tax credits or deductions when you make certain energy improvements in your home.

insulation

According to EPA.gov, you can save up to 15% on your home's heating and cooling costs by adding insulation in attics, floors over crawl spaces, and basement skirting joists, according to EPA.gov.

Through state-run HOMES rebates, homeowners in some states may qualify for up to $8,000 in segregation rebates. The discount may also apply to new HVAC systems in residential homes. Experts say those rebates may be available in the summer of 2023. Your refund will depend on the upgrades completed and your household's income.

Electric stoves

The new "High-Efficiency Electric Home Rebate Program" provides homeowners in low-income households — earning less than 150% of the area's median income — up to $14,000 in cash when they purchase certain energy-efficient electrical appliances like electric stoves and heat pumps, CNBC reported Water or electric heat pump tumble dryer.

Like the HOMES discounts, this offer will be available country-by-country and could be available later this year.

Energy-efficient doors and windows

The Noncommercial Energy Property Credit gives homeowners a 30% tax credit, worth up to $1,200 annually, for installing upgrades such as energy-efficient skylights, insulation, and exterior doors and windows. The distinction is non-refundable, which means you can use it to reduce your tax liability, but you can't claim the credit if you don't owe taxes.

Heat pumps, heat pump water heaters, biomass stoves, and boilers

The noncommercial energy property credit applies to heat pumps and other energy-efficient water heaters. This home improvement limit extends to $2,000 per year.

Solar panels and other renewable energy sources

Homeowners can receive up to 30% of the solar panel installation cost in non-refundable tax credits. Other forms of renewable energy also qualify for the credit, including wind power, geothermal energy, and biomass fuels.

Homeowners installing solar or other clean energy sources between now and 2032 can claim the tax credit. Unless the tax credit is extended, homeowners who made improvements in 2033 and 2034 can only claim 26% or 22% of the project cost, respectively.

Homeowners should also ask the solar company of their choice about tax credits and rebates available in their state or municipality to save even more money.

Energy-efficient home improvements can save you money on energy costs in the long run. These discounts and incentives can help your upgrades pay for them faster. Additionally, by making desirable home improvements, you can increase the resale value of your home if you decide to sell.