With more and more of us turning to eco living as means to save the environment, there is never a better time than now to consider making your home more energy efficient. Did you know however, that by making a few changes to your energy use you could also be saving yourself money on your income tax return? Yes, you will be able to do your part in saving the environment and also save yourself those well earned dollars.
There are many companies, such as Ausenco, who are making our towns, cities and highways more sustainable, but in our homes it falls into our hands to do our bit and get back that credit. As with many tax and financial decisions, it can be a confusing minefield to navigate. So, to help you out, here is everything you need to know about getting credit for your energy efficient home.
Costs for making your home energy efficient
As with many home modifications, it will cost you money at the beginning to get everything set up. This can/could include fitting eco friendly insulation, replacing a boiler with an eco friendly version or incorporating solar panels into your home. Whichever way you are changing your homes energy output, it is going to cost a fair amount of money, but some of these costs can be recuperated within your tax return. This is how it works;
You can currently claim back credit for 10% of the cost for a variety of home energy improvements. This can include windows, new doors, new roofing and insulation. This is the starting basic for those of us who are looking into making energy modifications to our homes. However, in some cases you can claim the full amount of the cost as long as you live in a qualified energy efficient home.
This will be determined by the dollar limit of the property. Every home has a limit on the properties dollar value, which will rise if you are living in a highly energy efficient home. To be qualified for the full credit amount, then you will need to have certain particulars in place. These can include qualified water heaters, qualified air conditioning and heating systems. The main thing to remember when making your claim is to keep a copy of the manufacturer’s certification statement for any appliances added to your home. You will only be able to make a claim if you have the right certification from a qualified manufacturer.
Residual energy efficient equipment for your home
Water heaters, windows and insulation all play their part, but what about the installation of items such as solar panels and wind turbines. More and more people are turning to harvesting the earth’s energy as an alternative electricity source than ever before, but do these items still nullify towards tax credits? The simple answer is yes.
Alternative energy installations, such as solar panels are eligible for 30% of the overall cost to be given back in credit. That is a large amount when you consider that these equipments tend to be very expensive in the first place.
Finally, you must remember that although there is no limit on the credit available to you for running an energy efficient home; if your credit is more than the tax you owe you can carry anything unused through to the next year.