How to Spend $8,000
So, you’ve closed on a home and that federal first-time homebuyer’s tax credit should be coming your way soon. Now what?
Well, first of all, realize it might take several weeks for the tax credit form to get processed. Even then, some homeowners will only see the credit as savings on their taxes, so don’t necessarily expect a check in the mail. Also remember that the credit’s maximum is $8,000 – it is actually equal to 10 percent of the purchase price of the house.
With this is mind, there are still a myriad of options of how you can spend or save the government’s gift. Here are some expert suggestions to get you thinking in the right direction.
Improve, Improve, Improve
1. Improve your Heating, Ventilation and Air-Conditioning system
“[You] can replace an old 10 SEER HVAC system with a higher performance unit,” says Paul Zuch, president-elect of the National Association of the Remodeling Industry.
2. Replace Old, Drafty Windows
This will save you hundreds of dollars a year in lower utility bills. Plus, in 2009 you can receive a tax credit for 30% of the cost of qualified energy-efficient windows and doors, up to $1,500. According to Remodeling Magazine’s 2009 Cost vs. Value Report, window replacements recouped approximately 75 percent of their cost at resale.
3. Turn Off Wasteful Water Heating
“Tank-type water heaters maintain a constant hot water temperature 24/7, 365 days a year,” says Zuch. “They can be replaced with a tankless water heater that only heats water as it is being used and provides an endless supply of hot water.”
4. Add Better Attic Insulation
This also is a great investment to lower utility costs.
5. Upgrade to Green, Water-Conserving Plumbing
“Reduce water consumption by hundreds of gallons a month with dual-flush toilets, water-saver shower heads and rain-sensor-equipped lawn irrigation systems,” Zuch says.
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