What is the 45L Tax Credit?

Recent tax legislation extended the Energy Efficient Home Credit to developers of energy-efficient homes and apartment buildings. The 45L Tax Credit, originally made effective on 1/1/2006, offers $2,000 per dwelling unit to developments with energy consumption levels significantly less than certain national energy standards.

What is eligible for 45L Tax Credits?

A dwelling unit should provide a level of heating and cooling energy consumption that is significantly less than certain national energy standards, dependent on when the unit is sold or leased. Based on current construction trends, many developments already exceed these standards. All residential developments and apartment buildings completed within the last 4 years are worth assessing for potential 45L tax credits. Eligible construction also includes substantial reconstruction and rehabilitation. Homebuilders and developers can still claim the 45L tax credit retroactively if they did not claim them on previous tax returns.

Who can benefit from 45L Tax Credits?

• Homebuilders
• Multifamily Developers

What types of buildings or projects can qualify for 45L Tax Credits?

• Affordable housing (LIHTC)
• Apartment buildings
• Assisted living facilities
• Production home developments
• Residential condominiums
• Student housing
• Substantial reconstruction or rehabilitation

KBKG Tax Insight: Energy Efficiency Tax Incentives Renewed Retroactively from 2018 through 2020

12/20/2019

On Friday, December 20th, President Trump signed and enacted a $1.4 trillion spending package that funds the government for the 2020 fiscal year, averting a second government shutdown for 2019. Included in the spending bills are numerous tax extenders, including many that had originally expired at the end of 2017. Among these tax breaks are … Read More

2019 Legislative Tax Updates for Real Estate

12/20/2019

For the most up-to-date information on Qualified Improvement Property, see our latest post. Our technical team has been keeping tabs on the latest updates on the Hill in regards to tax extenders and technical corrections, given how they may impact Green Building Tax Incentives (45L and 179D) and the cost recovery of Qualified Improvement Property … Read More

[WEBINAR] Tax Legislative Outlook for Real Estate

11/06/2019

Our technical team at KBKG has been working with those in DC who endeavor to bring more certainty to the real estate industry. Tax extenders and technical corrections to tax reform such as the “retail glitch,” still need to be addressed, but there has been movement. As Congress continues negotiations on appropriations, a stage has … Read More

KBKG Tax Insight: Congressional Letter Urges Year End Clean Energy Tax Policies

10/31/2019

Yesterday, a letter signed by over 70% of House Democrats was delivered to Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging them to prioritize the inclusion of clean energy tax policies in negotiations around must-pass legislation this year. As the House Ways and Means Committee takes action on a clean energy tax package, … Read More

[PRESS RELEASE] Tax Specialty Firm KBKG Joins Real Estate Roundtable

10/21/2019

Last year, specialty tax incentive firm KBKG joined the Real Estate Roundtable (RER), and several of KBKG’s executive leadership team currently serve as members of the organization’s President’s Council, Associate Council, and Committees. RER’s mission is to bring together leaders of the nation’s top, publicly held and privately-owned firms with major national real estate industry … Read More

KBKG Tax Insight: Bipartisan Bill Proposes Retroactive Extension and Updates to 45L Tax Credit Through 2022

10/03/2019

Senators Maggie Hassan (D-NH) and Susan Collins (R-ME), as well as United States Representatives Jimmy Gomez (D-CA) and Mike Kelly (R-PA), introduced the bipartisan New Home Energy Efficiency Act to extend the 45L Tax Credit. The bill proposes to retroactively extend the $2,000 credit per home from 2018 through 2020. Additionally, starting in 2021, the … Read More

BREAKING NEWS: Senate Finance Committee Launching Bipartisan Taskforces on Tax Extenders Including Green Building Tax Incentives

05/16/2019

Update as of 5/23/2019: The House Ways and Means Committee is currently putting together a package to address tax extenders such as the 45L tax credit and 179D tax deduction. Currently, a markup on tax extenders is expected sometime in June. BREAKING NEWS from 5/15/2019: The Senate Finance Committee launched bipartisan taskforces to address tax … Read More

Tax Insight: Senate and House Updates on Tax Extenders for 2018-2019

03/07/2019

Senate Update Last Thursday, February 28, 2019, Senate Finance Committee Chairman Chuck Grassley (R. Iowa) and Ranking Member Ron Wyden (D. Oregon) introduced bipartisan legislation to retroactively extend tax extenders for 2018 and 2019 while also providing disaster tax relief benefits to those affected by major disasters in 2018. “Congress needs to get out of … Read More

Tax Insight: Tax Extender Update from Senator Chuck Grassley

02/22/2019

On Thursday, February 14, 2019, Senate Finance Committee Chairman Chuck Grassley (R. Iowa) addressed tax policy and various provisions that KBKG and the Real Estate Roundtable have been monitoring closely. In his speech, Senator Grassley expressed his commitment to pursue tax extenders and rejection of press reports suggesting that some provisions may no longer be … Read More

What is the 45L Tax Credit?

What is eligible for 45L Tax Credits?

Who can benefit from 45L Tax Credits?

What types of buildings or projects can qualify for 45L Tax Credits?

What is the Process for Claiming the 45L Tax Credit?

45L Experts

You may qualify for 45L if you have developed, constructed or substantially renovated an apartment, condo or single family residence with 15 units or more since 2016.

Additional Resources

What are the Benefits of the 45L Tax Credit?

The Energy Efficient Home Credit offers a tax credit of $2,000 per dwelling unit to developers of energy efficient buildings completed after August 8, 2005. Below is a sample of expected benefits based on the number of qualified dwelling units.

$100,000 in 45L Tax Credits

$200,000 in 45L Tax Credits

$2,000,000 in 45L Tax Credits

45L Tax Insights