designer toolkit | Mar 10, 2023 |
Cash in on green design: How new tax credits apply to interiors

Interior designers aren’t typically in the business of offering clients tax tips, but a major congressional spending package is providing an opportunity to do just that. The wide-ranging Inflation Reduction Act, passed last August, included a bevy of new home improvement tax credits that are set to go into effect this year. Now homeowners can get significant rebates on things like new efficient ranges or window treatments—there’s never been a better time to invest in energy-smart spruce-ups.

The bill starts by extending existing credits. Up until January, homeowners were eligible for a $500 lifetime credit for energy-reducing home renovations—if you applied for the credit once, you wouldn’t be eligible for it again. Now the credit has been increased to $1,200 (or 30 percent of qualified expenditures), and you can apply annually through 2033, meaning clients working on multiyear home improvement projects could receive up to $12,000 back on taxes over the next decade as compared to a $500 one-time sum. Homeowners can also receive up to an additional $2,000 a year for making investments in heat pumps, and biomass stoves and boilers.

The IRA also introduced a number of home-related rebates for electric upgrades on items such as electric or induction stoves and ranges, as well as washers and dryers. These rebates, which are slated to become available in the fall, can add up to as much as $14,000 and be combined with other income tax credits.

While many of the items that qualify for the tax credit aren’t in a designer’s everyday realm (when was the last time you advised a client on a chic heat pump?), major appliances and things like window shades decidedly are. Even seemingly smaller upgrades, like energy-efficient window treatments, can qualify for a credit of up to $1,200 annually.

Of course, clients—especially those with ultra-high-end budgets—aren’t always driven by the prospect of saving some cash on April 15. But some may be motivated to make more sustainable choices for the sake of the planet or their own health. And while an $840 tax credit on a new stove might not be enough to sway a luxury design client to give up their professional-grade gas range, it might nudge a certain set of clients to consider a sleek induction cooktop, knowing they could see some of that money back—and minimize their family’s exposure to air pollutants that gas stoves emit, and that have been linked to health hazards such as asthma.

Brands are certainly not missing their chance to use the new incentives as a marketing hook. They’re in a unique position to highlight these rebates and promote a method for customers to get money back on their products without actually discounting anything themselves. Hunter Douglas has dedicated an entire section of its website giving customers step-by-step instructions on how to take advantage of the tax credit. “It can make a big difference for consumers,” says Stephanie Harvey, senior product manager for energy efficiency programs at Hunter Douglas, whose Duette Honeycomb shades qualify for the incentive. “And they can get that credit every year for the next 10 years,” she says. “So you could get new shades in your living room one year, apply for this credit, and then do your bedroom the following year and apply again. This is definitely a huge incentive and a big opportunity.”

Homepage image: ©Kkgas/Stocksy/Adobe Stock

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