Section 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 The 45L Tax Credit, originally made effective on 1/1/2006, offers $2,000 per dwelling unit to developments with energy consumption levels significantly less than certain national energy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.
Eligible 45L Tax Credit Apartment Buildings & Condos:
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?
• Multifamily Developers
The following types of projects should be considered:
• Affordable housing (LIHTC)
• Apartment buildings
• Assisted living housing
• Production home developments
• Residential condominiums
• Student housing
• Substantial reconstruction or rehabilitation
The basis for developing and supporting the 45L tax credit is a detailed energy analysis that must be certified by a qualified third-party. Our multi-disciplinary team of engineers and tax experts will ensure that you obtain the maximum tax credits and provide all the documentation necessary to sustain an IRS audit. We use IRS approved software programs for the IRC Sec. 45L certification.
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.
45L Tax Insights
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 for 2018 and beyond. We will post our updates here to keep you … Read More
BREAKING NEWS: Senate Finance Committee Launching Bipartisan Taskforces on Tax Extenders Including Green Building Tax Incentives
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
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
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