» The 45L Home Tax Credit

Overview

A Federal Tax Credit Worth $2,000 Per Qualifying Unit

The 45L Federal tax credit is designed to encourage the construction of energy-efficient dwellings, and has been available to eligible contractors since 2006. However, this energy-efficient incentive is still under-publicized, and thus, under-utilized.

Section 45L provides an income tax credit to home builders and multifamily residential developers to encourage them to invest in building energy-efficient properties.

Eligible Properties:

Affordable housing (LIHTC)
Apartment properties – up to 3 stories
Single family homes
Assisted living housing
Student housing

Multifamily residential properties four or more stories above grade could qualify under section 179D deduction

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HOW?

Qualification Requirements

Each unit should provide a higher level of energy efficiency than national energy standards. Many of the newer developments already exceed these standards based on recent building codes. We recommend any apartment or condominium project (new construction or rehabilitation) within the past four years is evaluated for the 45L tax credit.

Properties must be three stories or lower, and incorporate energy-efficient features such as high R-value insulation and roofing, windows, doors, and/or HVAC systems.

Net Benefits

The benefit is equal to $2,000 per qualifying residential unit or dwelling to developers of energy efficient buildings. Certification fees vary, and are charged on a per-unit basis as each unit has to meet the criteria to qualify.

Qualified Units	Credit Amount	Fee	Net Benefit
50	$100,000	$15,000	$85,000
100	$200,000	$27,500	$172,000

Tax Credit Requirements

Certification must be completed by a licensed, unrelated third-party professional. Our 45L certifications are evaluated, modeled and validated by our engineers.
When certification is complete, you receive a package with all necessary documentation to sustain the tax credit in case of IRS audit.

Get Started

The process starts with a no-cost review of your construction projects (in process or completed). With a good set of construction plans and project specifications, we determine which units can qualify for these credits. We discuss with you the necessary next steps to complete certification and documentation as required by the IRS under 45L.