Energy Efficient Homes: The 2007 Deadline
Under the Energy Policy Act of 2005, EPACT, the purchase of energy efficient appliances for the home will provide the homeowner with a tax credit when filing the year end tax forms. While the entire cost of the home appliance is not eligible for credit, a portion of the cost, subject to a maximum limit, can provide the homeowner with the added financial tool to purchase higher quality home energy efficient appliances, thereby providing the homeowner with improved energy expenses in the years following installation.
With the Energy Policy Act of 2005, many homeowners, in 2006, took advantage of the program. However, there were far more families who were unable to allocate the funds necessary to make the energy efficient upgrades or, more commonly, families who simply were not familiar with the program. In some communities, non-for-profit community outreach programs are educating homeowners in the provisions of tax credit under the Energy Policy Act of 2005, EPACT, in hopes of encouraging the homeowners to make the appropriate changes before the deadline of December 31, 2007.
For homeowners considering the energy efficiency upgrades, changes may include an upgrade of exterior doors, exterior windows and even replacing the HVAC unit. Other changes are more dramatic and may require a more significant cost including the installation of metal roofing and insulation replacement. For homeowners contemplating these changes, it is highly recommended that options be investigated to ensure optimal outcomes in terms of energy costs and tax deductions. To assist in financing the home energy efficient renovations, some homeowners are turning to second mortgage options and HELOC, home equity lines of credit, through lenders and financial institutions.
When looking for way to improve tax outcomes in 2007, consider the options available under the Energy Policy Act of 2005 as failure to act will result in loss of this tax saving, energy saving, option after December 31, 2007.