Less Than 3% of Homeowners Took Advantage of Clean Energy Tax Credits in 2023
The Biden Administration’s Inflation Reduction Act (IRA) included generous incentives to homeowners who invest in clean energy (such as solar panels) or in energy improvements (such as improved insulation, windows or doors).
Only 3.4 million households took advantage of those tax credits nationwide on their 2023 tax returns. That was just under 2.5% of filed tax returns. In Colorado, the number was 65,810 households, or 2.9% of tax returns filed. The states with the largest participation were California, Florida and Texas, but only Florida saw over 3% of tax returns that included the tax credit (3.26%), and the other two states had rates lower than Colorado’s.
seems to be the case since 15 percent of the 3.4 million nationwide returns which took advantage of the tax credit had Adjusted Gross Incomes under $50,000. Just under half of the returns had AGIs under $100,000. The largest bracket was AGIs of $100-200,000 that numbered 1.2 million returns or 35% of all filed returns.
the installation of geothermal heat pump systems. The average tax credit taken for those systems was $12,078.
A total of $8.4 billion in tax credits was taken by taxpayers. The program is still active, and any taxpayer who wants to reduce his/her home’s operating costs should seriously consider taking advantage of the tax credits, which remain in place through 2032. I have posted a link for its provisions at http:// RealEstateToday.substack.com
One of the smallest amounts, $55.4 million in tax credits, were claimed by 36,820 households nationwide for my favorite investment, energy audits.
The average tax credit for home energy improvement such as solar panels, solar water heating and home battery installations was $5,084. The average credit for improvement in energy efficiency, such as better windows, air sealing and heat pumps, was $882.
Questions to Ask When Buying a Solar-Powered Home
I have always said that the most affordable way to “go solar” is to buy a home that’s already solar-powered. The reason is that the price differential on a solar-powered home versus a home that is not solar-powered is minimal. (Don’t invest in solar if you’re not keeping your home at least 5-10 years, because you won’t recover the cost of your investment when you sell your home.)
So, let’s say you’re buying a solar-
powered home. Most of what you need to know should be on the MLS. Is the system owned or leased, or is it owned by a 3rd party which sells the electricity to the home owner under a Power Purchase Agreement (PPA)? The MLS says when it was installed and how big it is (in kilowatts), but you’ll need to find out if it still performs efficiently. You might want to hire an agent like me to represent you in your purchase.
The intention of the program is to benefit working families and small businesses to lower their utility expenses by improving their homes and offices. That
Your Best Deal on an EV Is a Used One From a Dealer
I learned the hard way that you can’t get a good deal on a used EV unless you buy it from a dealer. The reason is that there’s a 30% Clean Vehicle tax credit up to $4,000 on used EVs, but only if they are under $25,000 and purchased from a dealer. I have posted on http://RealEstateToday.substack.com a link to the IRS web page with the details on qualifying for the tax credit.
I tried selling my 2015 Model S, but no one wanted it at a reasonable price, so I ended up selling it to CarMax. Google “Used EVs Under $25,000” and you’ll see there are lots to choose from.
Although the credits vary from one improvement to another, it is generally a 30% on the cost of the improvement, including labor. The most popular improvement is solar photovoltaic installations, claimed by 752,300 households nationwide. The second most popular improvement was insulation, followed by exterior windows and skylights and central air conditioners.
Heat pump HVAC systems and heat pump water heaters were also a popular improvement, claimed by 267,780 and 104,180 households respectively.
Just under $1 billion in tax credits were claimed by 80,730 taxpayers for
Archive of Past Columns Is Online
Over the past two decades, this column has appeared in local weeklies and the Denver Post, and during that time I’ve written about every conceivable topic related to real estate. You can find and search that archive online at www.JimSmithColumns.com
Today’s the Day—Buyer Commissions Off the MLS
August 15th is the day which Denver’s MLS, REcolorado, set for removing buyer agent compensation from all MLS listings in compliance with the March 15th settlement between the National Association of Realtors (NAR) and a class of home sellers in Missouri. NAR had set the deadline for Aug. 17th. August 15th is also the date that new state-approved contracts consistent with the NAR settlement become mandatory in Colorado. I wrote about that on Aug. 1st. (see www.JimSmithColumns.com.)
Theoretically, home buyers will start paying the brokers who represent them in the purchase of real estate, but I will be surprised if a single home buyer pays anything at all for professional representation. That’s because most sellers will agree to offer compensation, leaving any seller who does not offer compensa-
tion in an untenable position — no buyer will want to make an offer on homes that require them to pay their agent. Keep in mind that most buyers are already heavily burdened in the transaction to buy a home, especially when they are having to finance their purchase with a mortgage at 6% or higher interest rates. They have to pay for inspection, for appraisal, for loan origination, first-year’s home insurance premium, and for escrow deposits to cover next year’s property taxes and insurance renewal. Only cash buyers are spared those heavy upfront costs.
If sellers wants to attract buyers, they will need to offer compensation. It’s just that they can’t advertise it on the MLS. They’ll still let buyers know, either on a home-specific website (like we provide), on a sign rider, or in a brochure.
We Need to Level-Up Sustainability & Recycling
Have you heard of toilet paper made from bamboo? I hadn’t either, but when I read the pitch for it, I was sold. Regular toilet paper is made, like other paper, from trees. But trees grow back slowly, whereas bamboo is famous for growing quickly. It would be a lot better for the planet if everyone switched to bamboo toilet paper. Rita and I received our first order last week, and we are sold on it. It’s the only toilet paper we’ll buy now, online from both Amazon and Costco.com.
I made another discovery recently. Those plastic jars you buy for everything from yogurt to milk and milk substitutes are wrapped in plastic that must be removed in order to recycle the bottle. At left is a picture of two quart bottles, plus a third in the middle with its label removed. The back of the milk bottle contains the notice shown at right:
It’s common practice in our home now to cut those plastic wrappers off and trash them before putting the bottles in the recycling bin. Some bottles, such as Activia’s Probiotic Dailies, have a marked “zipper” on them, making it easy. Others don’t even tell you that the wrapper must be removed, and you need a pointed knife to remove the wrap.
When we were in New Zealand in February, I saw a bicycle in the window of a Nespresso storefront. Looking closer, there was a sign on it saying that the bike’s aluminum frame was made of recycled Nespresso pods. We have one of Nespresso’s coffee makers, and now we keep one of their free postage paid recycling bags under the counter in our kitchen. Call Nespresso at 855-325-5781, and they’ll mail you some. K-cups can be recycled curbside after you remove the lid and contents. Do you want to help reduce the amount of single-use plastic? It’s becoming popular for restaurant-goers to bring Tupperware containers with them for leftovers. Rita does that. Also, there’s increasing popularity of “refill shops” where you buy bulk dry and liquid groceries to refill your own bottles or containers. Here’s a map from Googling it.
GASCHLER
Marvin Joseph Gaschler
July 13, 1945 - July 26 2024
Marvin Joseph Gaschler, beloved brother and uncle, 79, of Brighton, Colorado, died July 26, 2024.
Marvin was born in Quinter, Kansas on July 13, 1945, to parents Rudolph and Amelia Gaschler. Marvin was raised in Brighton along with his two sisters, Margie and Linda.
Marvin graduated from Brighton High School in 1963.
memorable trip to the company store. He retired in 2007.
Marvin lived frugally. He was not one to travel far from home, nor upgrade his worldly possessions current with the times.
Marvin served his country as a soldier in the Seventh Army of the United States Army from October 1965 to October 1967.
Both before and after he was drafted, Marvin worked at Samsonite. He retired in 2007 after 42 years with the company.
Marvin was preceded in death by his parents, sister Maribeth, and sister Margie.
Marvin is survived by his sister, Linda (Jim) Humphrey of Brighton, and many admiring nieces and nephews. Marvin was also a loving and caring Great Granduncle, who no doubt passed along his legacy of family adoration to the last generation to know and love him in person.
Marvin Joseph Gaschler, loved by both family and friends, passed away July 26, 2024, after su ering a fatal fall. As he passed away, he was surrounded by family.
Marvin grew up in Brighton, the son of Rudolph and Amelia Gaschler, and middle brother to older sister Margie and younger sister Linda. His baby sister Maribeth passed away at a very young age.
In 1963, he graduated from Brighton High School.
After two years of employment at Samsonite, Marvin was drafted and served his country in the United States Army. He was dispatched to locations near and far as part of the Seventh Army (Seven Steps to Hell) from October 1965 to October 1967. He proudly served in the combat-ready eld army defending the same Western European land that had been liberated in World War II. During service, he was fortunate to visit his ancestral home of Germany.
Service to country was followed by longevity in the workforce and a career spanning 42 years at Samsonite. He used his learned trade to x family suitcases and baggage, and provide the opportunity for a
Marvin was a bachelor. Perhaps knowing his own personal demons all too well, he chose not to venture into the arena of family man, husband, or father. He spent his days largely in solitude. At all times, he carried himself with the dignity of self-su ciency.
He enjoyed hunting and shing and made many memorable trips to the Colorado mountains and plains of Western Kansas with his brother-in-law Jim and his nephews. He would use the opportunity to visit relatives still living on the family farm in St. Peter, Kansas. He also enjoyed his time on the gun range with friends and family. He was imbued with the values of his generation, and the generation that preceded it. He pinched his pennies, but would gladly share with others, including but certainly not limited to the Colorado Lottery. He was organized and meticulous, maybe, or maybe not, to a fault.
Like so many others, Marvin fought the demons of alcohol. But he never let it interfere with his ability to hold down his job, or as an excuse to break the law, or commit any crime other than perhaps the stranger’s perception of curmudgeon. He had a good heart. In large measure, he was mostly misunderstood and perhaps toward the end, hard of hearing and ostensibly inattentive, indi erent, or unwilling to listen. But he loved those around him and would even bless them with his presence when his strong natural inclination was to avoid attention and crowds.
He was deeply loved from afar and viewed with a ection. His ability to confront life’s di culties without imposing on his relatives is a largely unappreciated and unacknowledged gift. He will be remembered for it, and the valuable lessons it teaches.
Marvin’s family will, with hearts full of love, remember him most of all as a man’s man. He valued accountability, selfsu ciency, frugality, and a good meal. He shared his values with his family, and he led by example.
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