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While the Austin City Council is not giving home sellers a break this year, the federal govern- ment is coming through with some tax breaks for the energy-conscious homeowner. For 2009 only, homeowners can get certain tax credits for making energy efficient improvements on a primary residence.
What does this have to do with the Austin City Council? As of June 1 homes older than 10 years are required to get an energy audit and disclose the results to prospective buyers. So along with the new coat of paint and fresh flowers in the yard, homeowners have an added expense to get their homes sold.
The idea behind the city council ordinance is a noble one of keeping Austin green, but the timing is lousy with job losses and a slower housing market looming over the city. "There's never a good time to add fees to a transaction," City Council Member Mike Martinez said in the Austin-American Statesman, "but I think this requirement is a good thing. It allows the consumer to fully understand the purchase they're about to make. If you spend hundreds of thousands of dollars on an investment, you would want to know how efficient that investment is going to be for you."
Fortunately recession-strapped homeowners are not required to make improvements as a result of the $200-500 audit, however the idea is to encourage sellers or buyers to make their houses more energy-efficient. An audit can help pinpoint exactly what needs to be done to make a home greener.
This is where the tax credits come in. Under the Emergency Economic Stabilization Act of 2008, also known as the Obama stimulus package, Congress has provided two tax credits for homeowners making energy efficient improvements. There is a $500 lifetime credit, which gives a 10 percent credit for improvements such as new insulation, windows, skylights, energy-efficient roofing or exterior doors.
The other tax credit is a 30 percent-of-cost credit for energy improvements. This would include $50 for each advanced main air circulating fan; $150 for qualified furnaces, such as natural gas or propane; and $300 for qualifying energy-efficient heating and cooling systems or hot water heaters.
In a buyers market, sellers wanting an edge may go ahead and make some of the improvements indicated by an energy audit, which focuses on things like insulation and the condition of the heating and cooling systems. This year's tax credits may help offset some of those costs.
Of course, these tax credits and Austin Energy incentives aren't just for those wanting to sell their home. According to Austin Energy, in the past five years homeowners have made improvements that have collectively saved $3 million by reducing kilowatt-hours by 38 million.
It's a good idea to get the exact details on the tax breaks from a tax professional.
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The point of the audits are to reduce consumption so the city owned utility doesn't have to build another power plant. The audits focus on low cost upgrades that are the most economically viable ways to reduce energy demand. The audits are a way to bring the rebates and home's inefficiencies to light as just having rebates didn't bring enough flies to the honey. For more info on the audits or energy efficiency visit http://www.austinauditors.com and click the link you're interested in.
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