Can I get Fed Tax Cred for Energy Efficiency on a home purchase?
September 1, 2009 2:18 PM Subscribe
Can I get the Federal Tax Credits for Energy Efficiency if I am buying the house right now, and the current homeowner is replacing the furnace for me?
I am in the process of buying a home, and during the inspection we found that the furnace needs to be replaced. The homeowner has agreed to put in a basic one, but has given us the option to 'upgrade' to a more efficient model at our cost.
The question is, if we are paying for part of the furnace, who would qualify(if they met all other conditions) for the tax credit? The credit could be as much as $700, and the extra cost of a more efficient furnace is around $900, so I think it makes sense to try to get it if we can.
If the seller is the one who qualifies, is it a bad idea to try and convince them to pay the extra and claim the tax credit? Maybe even if we include the difference?
I am in the process of buying a home, and during the inspection we found that the furnace needs to be replaced. The homeowner has agreed to put in a basic one, but has given us the option to 'upgrade' to a more efficient model at our cost.
The question is, if we are paying for part of the furnace, who would qualify(if they met all other conditions) for the tax credit? The credit could be as much as $700, and the extra cost of a more efficient furnace is around $900, so I think it makes sense to try to get it if we can.
If the seller is the one who qualifies, is it a bad idea to try and convince them to pay the extra and claim the tax credit? Maybe even if we include the difference?
Technically, whoever buys the furnace and has the receipt will be able to claim it on their taxes.
posted by CwgrlUp at 6:49 PM on September 1, 2009
posted by CwgrlUp at 6:49 PM on September 1, 2009
Response by poster: 1.My Realtor claims it is not legal in Minnesota to sell a home without a working furnace, so they have to replace it or we cannot move in. In other words - installation after we move in is not an option.
2.The seller has said they will give us the receipt and all documentation from the installation.
posted by dpollitt at 8:24 PM on September 1, 2009
2.The seller has said they will give us the receipt and all documentation from the installation.
posted by dpollitt at 8:24 PM on September 1, 2009
1. Sounds dubious. You might not be able to legally live in a house without a furnace, but I can't imagine you can't sell a house without a furnace.
2. You can probably apply for and get the credit, but if you get audited, you may be in trouble, since you're not the purchaser.
posted by electroboy at 7:33 AM on September 2, 2009
2. You can probably apply for and get the credit, but if you get audited, you may be in trouble, since you're not the purchaser.
posted by electroboy at 7:33 AM on September 2, 2009
This thread is closed to new comments.
1. Agree to lowering the price of the home by ${cost of furnace} or cutting you a check for ${cost of furnace}, and install after purchasing the house to get the tax credit.
2. Negotiate with the seller to install the higher efficiency furnace of your choosing for some other price that reflects the higher cost, but factors in the tax credit.
I sort of doubt that 2 will be preferable to the seller, since they have to wait to get their credit, but it's worth a shot. I'd probably opt for 1, because it allows you more control over the choice the furnace and the contractor, rather than relying on the seller, and you get the tax credit.
When I got estimates for a new HVAC system, the regular system and high efficiency ended up being about the same price, due to the credit. We were having ductwork installed also, so that distorted the savings quite a bit. I'd guess you'd save some money on the higher efficiency system. Even if you don't, you'll save on energy costs down the road.
posted by electroboy at 6:13 PM on September 1, 2009