Furnace & AC Replacement Cost Calculator
Select your equipment type and home size to estimate installed replacement cost
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Sources & Methodology
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HomeAdvisor -- HVAC Installation Cost Data 2025
Aggregated contractor quotes and project cost data for furnace and AC installation across US regions used to establish equipment and labor cost ranges
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Air Conditioning Contractors of America (ACCA) -- Standards and Cost Data
ACCA industry standards for residential HVAC sizing (Manual J), installation practices, and contractor labor rate benchmarks by region
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ENERGY STAR / IRS -- Federal Tax Credits for Energy Efficiency (IRA 2022)
IRS guidance on Inflation Reduction Act Section 25C federal tax credits for high-efficiency HVAC equipment including qualifying furnaces and heat pumps
Methodology: Equipment cost ranges by type: Gas 80% AFUE $800-1,600, Gas 96% $1,200-2,200, Gas 98% $1,800-3,200, Oil furnace $1,500-2,800, Electric furnace $600-1,200, Heat pump $1,200-2,500. AC: 14 SEER $900-1,800, 16 SEER $1,300-2,500, 18 SEER $1,800-3,200, Mini-split $700-1,500. Labor: single unit $800-1,800, both units combined $1,200-2,500. Size multiplier: under 2,500 sqft = 1.0x, 2,500-3,500 sqft = 1.15x, over 3,500 sqft = 1.30x. Ductwork and regional multipliers applied to total. All costs include equipment, labor, permits, and refrigerant. IRA credits estimated per IRS Section 25C guidance.
Last reviewed: March 2026 -- cost ranges verified against 2024-2025 HomeAdvisor HVAC project data and ACCA regional labor rate surveys.
Furnace & AC Replacement Cost Calculator -- Complete 2025 HVAC Cost Guide
Replacing a furnace, air conditioner, or both is one of the largest home improvement expenses most homeowners face. Understanding how much HVAC replacement costs by equipment type, efficiency rating, and home size helps you budget accurately, evaluate contractor quotes, and take advantage of federal tax credits available under the Inflation Reduction Act.
Furnace Replacement Cost by Type -- 2025 Installed Prices
Total HVAC Cost = Equipment + Labor + Ductwork Adjustments x Regional Factor
Example: Gas furnace 96% AFUE + Central AC 16 SEER, 2,000 sqft, good ducts, Midwest.
Furnace equipment: $1,200-$2,200 | AC equipment: $1,300-$2,500
Combined labor (both same visit): $1,200-$2,500 | Size factor: 1.0x
Total estimate: $3,700 - $7,200 installed
Furnace equipment: $1,200-$2,200 | AC equipment: $1,300-$2,500
Combined labor (both same visit): $1,200-$2,500 | Size factor: 1.0x
Total estimate: $3,700 - $7,200 installed
| Equipment Type | Equipment Cost | Installed Total | Lifespan | IRA Credit |
|---|---|---|---|---|
| Gas Furnace 80% AFUE | $800-$1,600 | $2,500-$5,000 | 15-20 yrs | No |
| Gas Furnace 96% AFUE | $1,200-$2,200 | $3,500-$6,500 | 15-20 yrs | Up to $600 |
| Gas Furnace 98% AFUE | $1,800-$3,200 | $4,500-$7,500 | 15-20 yrs | Up to $600 |
| Oil Furnace | $1,500-$2,800 | $3,500-$7,000 | 15-25 yrs | No |
| Electric Furnace | $600-$1,200 | $1,500-$4,000 | 20-30 yrs | No |
| Heat Pump (air source) | $1,200-$2,500 | $3,500-$8,000 | 10-15 yrs | Up to $2,000 |
Central AC Replacement Cost -- 2025 Benchmarks by SEER Rating
| AC Type | Equipment Cost | Installed Total | Annual Savings vs 10 SEER | IRA Credit |
|---|---|---|---|---|
| 14-15 SEER Central AC | $900-$1,800 | $2,500-$5,500 | ~$100-$150/yr | No |
| 16-17 SEER Central AC | $1,300-$2,500 | $3,500-$7,000 | ~$180-$250/yr | Up to $600 |
| 18+ SEER Central AC | $1,800-$3,200 | $4,500-$9,000 | ~$280-$400/yr | Up to $600 |
| Mini-Split (1 zone) | $700-$1,500 | $2,000-$5,000 | Varies by use | Up to $2,000 |
Should You Replace Furnace and AC at the Same Time?
Replacing both the furnace and AC simultaneously is almost always the better financial decision when both units are over 12 years old. HVAC contractors charge $500 to $1,500 less for combined replacement versus two separate visits because setup time, refrigerant charging, system commissioning, and permitting overhead are shared. Additionally, matched systems (same brand, same generation) perform more efficiently together, often achieving 5 to 10% better seasonal efficiency than mismatched equipment.
If one unit is significantly newer (under 8 years old), replacing only the aging unit makes sense. But if both systems are approaching end of life, the combined replacement discount plus the savings from avoiding a second service call in 1 to 3 years makes simultaneous replacement the smarter choice.
IRA Federal Tax Credits for HVAC -- What You Can Claim in 2025
The Inflation Reduction Act (IRA) provides federal tax credits under IRS Section 25C for qualifying high-efficiency HVAC equipment. For 2025, the credits include: up to $600 for a qualifying natural gas furnace meeting 97% AFUE efficiency, up to $600 for a qualifying central AC meeting efficiency thresholds, and up to $2,000 for qualifying heat pumps. The annual cap is $1,200 for most equipment (excluding heat pumps at $2,000). Credits are 30% of equipment cost up to the annual cap and are claimed on IRS Form 5695.
💡 Pro tip -- Get 3 quotes and verify SEER2 compliance: As of January 2023, the DOE raised minimum efficiency standards for new HVAC equipment in most climate zones. Contractors selling old 13 SEER inventory at a discount may be installing equipment that cannot legally be used in new installations in your region. Verify that any quoted equipment is SEER2-rated and meets your regional minimum requirement (13.4 SEER2 for Northern states, 14.3 SEER2 for Southern states). Also verify the contractor is NATE-certified and pulls the required permit -- unpermitted HVAC work can void homeowner insurance claims and cause problems when selling the home.
Frequently Asked Questions
How much does it cost to replace a furnace?
Furnace replacement costs range from $2,500 to $7,500 fully installed depending on fuel type, efficiency, and home size. A standard 80% AFUE gas furnace costs $2,500 to $5,000 installed. A high-efficiency 96% AFUE gas furnace costs $3,500 to $7,000. Oil furnace replacement runs $3,500 to $6,500. Electric furnace replacement costs $1,500 to $4,000. Costs increase 10 to 20% for homes over 2,500 square feet requiring larger equipment.
How much does it cost to replace central air conditioning?
Central AC replacement costs $3,000 to $8,000 fully installed for most homes. A 14-15 SEER unit for a 2,000 square foot home costs $2,500 to $5,500 installed. A 16-17 SEER high-efficiency system runs $3,500 to $7,000 installed. High-efficiency 18 SEER and above costs $4,500 to $9,000 or more. Costs increase with home size and any duct modifications required.
Is it cheaper to replace furnace and AC at the same time?
Yes. Replacing both at the same time typically saves $500 to $1,500 in combined labor compared to two separate visits. HVAC contractors complete both installations in a single visit, sharing setup, refrigerant charging, system testing, and permitting overhead. If both systems are over 12 years old, simultaneous replacement is almost always the most cost-effective approach.
How long does a furnace last?
A gas furnace typically lasts 15 to 20 years with proper annual maintenance. Oil furnaces last 15 to 25 years. Electric furnaces can last 20 to 30 years. Heat pumps last 10 to 15 years. Signs a furnace needs replacement include frequent repairs costing more than 50% of replacement cost, carbon monoxide leaks, cracked heat exchangers, uneven heating, and AFUE efficiency below 78% for a unit over 15 years old.
What is the federal tax credit for a new furnace or AC?
The Inflation Reduction Act provides federal tax credits under IRS Section 25C. Qualifying high-efficiency gas furnaces (97%+ AFUE) and central AC units receive up to $600 in federal tax credits. Heat pumps meeting efficiency thresholds receive up to $2,000. The credit is 30% of equipment cost up to the annual cap. Total annual credit cap is $1,200 for most HVAC equipment (excluding heat pumps). Claimed on IRS Form 5695.
Should I repair or replace my furnace?
Replace if the repair cost exceeds 50% of replacement cost, the unit is over 15 years old, it has had multiple major repairs in 3 years, it is below 80% AFUE efficiency, or it has a cracked heat exchanger (a safety issue requiring immediate replacement). Repair if the unit is under 10 years old and repair cost is under $500. The 5,000 rule: if age times repair cost exceeds $5,000, replacement is usually more economical.
How long does AC last?
A central air conditioning system typically lasts 12 to 17 years with annual maintenance including coil cleaning and refrigerant checks. Signs an AC needs replacement include age over 15 years, refrigerant R-22 (phased out and expensive), frequent breakdowns costing more than $500 per year, SEER rating below 10, and inability to maintain temperature on hot days despite running continuously.
What size furnace do I need for my home?
Furnace sizing uses BTU output. A rough guideline is 30 to 60 BTU per square foot depending on climate, insulation, and ceiling height. A 2,000 square foot home in a moderate climate needs a 60,000 to 80,000 BTU furnace. Northern climates may require 80,000 to 100,000 BTU for the same home. Oversizing causes short cycling and efficiency loss. A proper Manual J load calculation by an HVAC contractor is recommended for accurate sizing.
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