ReNews -- Remodelors Council News - 05/27/2009 (Plain Text Version)Greg Miedema, CGR, CGB, CAPS View Graphical Version | Subscribe to NAHB Publications | Email our Editor... In this issue: Remodelers Benefit from Energy-Efficiency Tax CreditsNAHB hosted a media teleconference on claiming newly-expanded energy-efficiency tax credits for home remodeling on May 12. The panel of experts reviewed the scope of the tax credits and projects that qualify for the maximum credit of $1,500. Remodelers are using this recently expanded federal tax credit to help sell projects because energy-efficiency remodeling also helps home owners to save on utility bills. Teleconference moderator NAHB Remodelers Chairman Greg Miedema, CGR, CAPS, GMB, CGP, and President of Dakota Builders in Tucson, Ariz., pointed out that with 111 million existing homes in the U.S., much more work needs to be done to update these homes for energy efficiency. Director of Tax Issues at NAHB, Rob Dietz, gave an overview of the existing homes tax credit (25C), which is equal to 30 percent (up to a maximum of $1,500) of expenditures for qualified energy-efficiency products placed in service at a principal residence after Dec. 31, 2008 and before Jan. 1, 2011. This credit offsets tax liability dollar for dollar. A taxpayer without liability can carry the credit forward to the next tax year. Taxpayers can claim a percentage of the cost of jointly-owned property, such as neighborhood or condo association shared property. The tax credit applies to building envelope materials (such as insulation, windows, doors, and roofing) and qualified energy property (such as water heaters, furnaces, air conditioners, and heat pumps). Installation costs for qualified energy property improvements may be counted for the credit, but not for building envelope improvements. All of the products have minimum efficiency requirements outlined on www.nahb.org/efficiencytaxcredit. Some remodelers and new home builders are also using a related tax credit to help home owners install products that help generate energy (25D). This credit also covers 30 percent of costs but without a cap. Qualifying property includes installation of solar electric, geothermal heat pumps, fuel cells, or wind property. In addition, installation costs can be included into the calculation of the credit. New home builders can install energy property and provide an itemized cost to the buyer for tax claims upon purchase of the home. Both tax credits, existing homes (25C) and energy property (25D), can be claimed on IRS Form 5695. Michael Strong, CGR, GMB, CGP, President of Brothers Strong in Houston, Texas, explained that green remodeling is their full-time purpose and that the tax credit is very important to his business and consumers. “This credit is one of the best kept secrets for selling remodeling jobs.” Strong creates a worksheet for the home owner calculating their options and the value and affordability generated by using the credits and possible savings on future utility bills. Donna Shirey, CGR, CAPS, CGP, President of Shirey Contracting in Issaquah, Wash., said her company has been an energy-efficient builder since 1987. She feels consumers continue to drive the market on energy-efficiency. Shirey Contracting is building a zero-energy demonstration home to show consumers energy-efficiency options. They are installing a wind turbine, evacuated tubes for solar water heating, and a geothermal system for generating the home’s energy. She calculates these improvements are worth an $11,000 credit and helps to make energy solutions for the home more affordable. During the question and answer session, the remodelers discussed the benefits of conducting a pre-remodel energy audit and post-testing to measure changes in the home’s energy efficiency. Energy audits can help identify the location of energy losses and calculate possible utility savings. Remodelers say energy-efficiency improvements can be suggested on nearly every job because when the house is under examination there is an opportunity to look at all the systems of the house and make suggestions on the best places for improvements. To replay the teleconference, download a fact sheet on the energy-efficiency tax credits, or access a comprehensive web site on the credits, visit www.nahb.org/efficiencycall. For more information or to contact us directly, please visit www.NAHB.org | ©2009, National Association of Home Builders |