Does a New HVAC System Increase Your Home Value?

If you’re on the fence about replacing your home’s heating and cooling system, you’re likely wondering whether installing a new HVAC system will increase your home value. If you live in an older home or your current HVAC system is on the outs, a new system can help heat and cool your home more efficiently and boost your home’s value. Let’s review how a new HVAC system affects your home’s value, and when to hire an AC installer to get started. 

Will Installing a New HVAC System Increase Home Value?

Yes, installing a new HVAC system can increase your home value by 5% to 7% with a return on investment (ROI) of about 30%. This projected increase is especially true if you replace your current setup with an energy-efficient system, providing additional benefits to future buyers in the long run. Potential home buyers will view a new system as a money saver on electricity bills and lower maintenance costs for at least 10 to 15 years. Consult a local AC installer about the best time to replace your HVAC system before selling your home.

Factors That Influence HVAC Value

The ROI of your HVAC system depends on several factors, such as the type of HVAC you install and its energy efficiency. Here are the different factors that determine your HVAC's impact on home value.

Location and Climate

In hot climates, you’ll see significant resale value in installing an efficient air conditioning unit, helping you and future owners save on energy costs. In colder regions, upgrading your heat pump or furnace will reap better ROI. Not only will these upgrades increase your home’s value, but they’ll also make the home more comfortable and appealing to buyers.

Energy Efficiency 

The higher the SEER rating on your HVAC systems, the more energy efficient they are (and the lower your energy bills). A good SEER rating for an air conditioner is 15 to 16, and a good SEER rating for a furnace is 15 to 20. These higher ratings mean lower ongoing operating costs, increasing your home value to buyers. 

Smart thermostats also increase your HVAC’s energy efficiency—and ROI—by offering zoning capabilities and scheduled settings to maximize energy savings.

Sustainability

More and more homeowners are concerned and invested in reducing their carbon footprint. A more up-to-date and energy-efficient HVAC system appeals more to buyers who care about sustainability. 

HVAC Type

Because HVAC systems range in type and function, the ROI depends on the type of HVAC system you install.

DIY vs. Hiring a Pro

For an HVAC system to reap its full ROI—or any ROI at all—it must be installed by a qualified local HVAC installer. Improper installation can lead to poor performance, inefficient heating and cooling, and more frequent repairs. A licensed tech ensures proper sizing, ductwork design, installation, and overall performance. 

Not to mention, installing an HVAC system is not a DIY project because it poses a huge safety risk. Improper electrical wiring and handling of refrigerant can be hazardous. Some manufacturers even void warranties if a licensed professional doesn’t install and repair the HVAC system.

How a New HVAC System Increases Home Value

A new HVAC system will boost your home’s appeal and value to potential buyers in a few important ways.

Energy Efficiency

New HVAC systems are more energy-efficient than older models, leading to major savings on your monthly energy bills. Reduced costs over time equal more money in your (or future homeowners’) pockets for other home improvements. Plus, potential home buyers may appreciate that your HVAC system has a lesser environmental impact than older, outdated models.

Tax Benefits

Investing in a new HVAC system means extra rebates, plus potential tax deductions of up to 10% of the installed costs. While potential home buyers won’t get to share in the rebate payments, you can appreciate the tax benefit that can offset the cost of installing a new HVAC system.

Higher Home Appraisal

When selling your house, a home appraisal by a professional determines what your home is worth and what potential buyers should pay for it. A professional home appraiser will likely consider your property worth more if its systems are updated with the newest appliances, such as a new HVAC unit. Since HVAC units are big-ticket investments, appraisers will highlight a recent installation in their appraisal.

What Kind of ROI Can I Get on My HVAC Investment When I Sell My Home?

The ROI on an HVAC system investment depends on how much value it adds and how much you paid for it. For example, if you spent $10,000 on HVAC upgrades before selling your home, and it adds about $2,500 to $3,000 to the sale price of your home, your ROI will be 25 to 30%. You are less likely to see a full return on your investment right away unless it’s a seller’s market, and demand for your home drives the price and value of a new HVAC up significantly. 

How Much Does It Cost to Install a New HVAC System?

A new HVAC system costs anywhere from $5,000 to $12,500, depending on where you live, its size and age, and the brand. The type of HVAC system will also impact the cost, from duct-free to hybrid. The average price for a new system is $7,000 for materials and $1,500 for labor. There may be additional costs for additional tasks, including adding zones, installing a new thermostat, and including humidity controls.

Signs You Need a New HVAC System

Since most HVAC systems last about 10 to 30 years, older appliances will start to break down over time. Here are some signs to watch out for that may indicate you need a new HVAC system: 

Heating: 

• Uneven heating 

• Decreased efficiency 

• Odd noises 

• Pilot light comes on 

• Evidence of rust, corrosion, or cracks 

• Higher levels of carbon monoxide 

Cooling: 

• Refrigerant leaks 

• Inconsistent cooling 

• High humidity levels 

• Requires frequent repairs 

• Hissing sounds 

• Higher energy bills 

One or more of the signs listed above could mean it’s time to look into purchasing a new HVAC system. If you’re unsure which type to buy, you can hire an air conditioner installer near you to inspect your current system and recommend a replacement. 

How Angi Gets Its ROI Data

Home is the most important place on earth, which is why Angi has helped more than 150 million homeowners transform their houses into homes they adore. To help homeowners maximize the value of their investments, we gather ROI data from reputable sources, including industry reports, real estate studies, and interviews with market experts. We calculate the average resale value for projects by multiplying the ROI against the project’s average cost according to our cost data, which is sourced from thousands of real Angi customers. 

Want to help us improve our data? Send us a recent project quote or home appraisal value to costquotes@angi.com. Quotes and personal information will not be shared publicly.