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Real estate: Cashing in on energy tax credits

(FLORIDA TODAY) - Homeowners don’t need to be in the housing market to take advantage of government incentives to stimulate the economy. They may be able to claim tax credits for making improvements to their current home.

The federal government is offering tax credits at 30 percent of the cost, up to $1,500, for home renovation projects that improve energy efficiency. Work must be done during 2009 or 2010, and the credits apply to the homeowner’s existing principal residence.

Eligible improvements include new windows and doors, insulation, roofs and air conditioning systems. Also covered at 30 percent of the cost — but without the $1,500 cap or 2010 deadline — are systems that use solar, geothermal or wind energy.

Previous energy efficiency tax credits were for 10 percent of the cost, up to $500. Former President George W. Bush raised the amounts to 30 percent and $1,500 for 2009 in last fall’s bailout bill, and President Barack Obama extended the tax credits to 2010 in this year’s stimulus package.

“Here’s where people can really make out: Air conditioners and heat pumps break,” said Philip Fairey, deputy director of the Florida Solar Energy Center in Cocoa. Replacing an old system with an energy-efficient version will save power costs in the future, and come with a credit the buyer can claim at tax time.

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