45L Energy Efficient Home Credit

A $2,000 Federal Tax Credit per Qualified Dwelling Unit

45L Energy Efficient Home Credit

A $2,000 Federal Tax Credit per Qualified Dwelling Unit

§45L Energy Efficient Home Credit

The Energy Efficient Home Credit, as established by the Energy Policy Act of 2005, allows eligible developers to claim a tax credit for each dwelling unit. The credit was extended by the “Consolidated Appropriations Act, 2021” and applies to residences sold or leased on or before December 31, 2021. Single family homebuilders and multifamily developers can benefit from the §45L Tax Credit.

The maximum credits per dwelling unit are:

  • $2,000 per unit for new energy-efficient home.
  • $1,000 per unit for manufactured homes.

REQUIREMENTS

An eligible contractor must have constructed a qualified energy efficient home, as well as owned and have had a basis in the home during its construction. Newly constructed properties and renovations to existing residences are eligible when they meet the following qualifications:

  • Certified to provide an annual level of heating and cooling energy consumption that is at least 50% below a comparable dwelling unit constructed in accordance with the standards of 2006 IECC.
  • Improvements to the building envelope that provides at least one fifth of the 50% reduction in energy consumption.
  • Three stories above grade or less in height.
  • Sold or leased as a residence (the credit can be taken retroactively for three years back or to any open tax year).

The §45L Tax Credit applies to single-family homes as well as apartment complexes, assisted living facilities, student housing and condominiums. Each unit in a multifamily residential facility may qualify.

OUR SERVICE

Our §45L Tax Credit team includes HERS raters and tax professionals who will perform free assessments to prequalify your homes. Our study includes:

  • Reviewing construction documents.
  • Interviewing design professionals, project managers, and other relevant personnel.
  • Performing necessary testing and inspections.
  • Modeling energy efficiency using IRS-approved software.
  • Preparing certificates of compliance signed under penalties of perjury by a HERS rater.
  • Coordinating with your tax preparer.
  • Providing free audit support.

CASE STUDY

Each unit in a newly constructed apartment community qualified for the $2,000 per unit §45L Tax Credit. With 250 units, the developer received a total tax credit of $500,000.

PROPOSAL REQUEST