New Tax Incentives Offer Assistance to Home Owners, Builders

New federal tax incentives should benefit current home owners and builders. Thanks to the Tax Incentives Assistance Project (TIAP), interested individuals can discover what sort of new tax credits will cover energy-saving technologies and practices. The guidelines cover existing homes, new homes, and new manufactured homes.

TIAP is a nonprofit effort by a coalition of more than a dozen organizations, led by the American Council for an Energy-Efficiency Economy (ACEEE) and the Alliance to Save Energy, to inform consumers and businesses about federal tax incentives enacted in the Energy Policy Act of 2005.

“This guidance clarifies what measures are eligible for tax incentives and provides clear direction to taxpayers on what they need to do to qualify for the tax incentives,” said ACEEE Executive Director Steven Nadel, who coordinates the overall TIAP effort.

“We commend the IRS for issuing guidelines less than two months into the two-year window for claiming the energy-efficiency tax credits,” said Alliance to Save Energy President Kateri Callahan. “Having this guidance so soon enables consumers to purchase and install insulation, Energy Star-labeled windows and other energy- and money-saving home improvements in time to lower both current winter energy costs and their 2006 federal taxes.”

For existing homes, homeowners can claim credits totaling up to $500 for any combination of eligible measures installed in their primary residences. Home builders are eligible for tax incentives of $2,000 for new homes.

To qualify, homes must be designed to use 50 percent less energy for heating and cooling than a reference home design that meets the standards of Section 404 of the 2004 International Energy Conservation Code (IECC). The rules set out the procedures for documenting and certifying the home’s energy performance and rely heavily on home energy rating procedures developed by the national Residential Energy Services Network (RESNET).

For manufactured new homes (those governed by federal construction standards), the new energy law sets forth a slightly different set of qualification criteria, allowing builders of theses homes to qualify for either a $2,000 credit, using procedures similar to those applicable to new homes as described above, or of a $1,000 credit if homes are documented to save 30 percent of the heating and cooling energy compared to a reference home that meets the standards of Section 404 of the 2004 IECC.

To see if you can receieve these tax benefits on your Florida home loan, consult with experts in the field.