With the current boom in housing and residential properties and the populations’ rising concern for climate control, many contractors and builders have taken this opportunity to shift their building approach to construct more eco-friendly properties. This shift has opened the door to massive tax credits for individuals in the construction industry.
Contractors, builders, and property owners who have either constructed or renovated homes or apartments to include energy-efficient elements can be rewarded for their efforts with the 45L Energy Efficient Home Credits. These credits were designed to incentivize people to reduce energy consumption when constructing a new home or residential building.
How Can You Benefit From 45L?
45L is a tax credit given to builders, contractors, and property owners who have decreased energy consumption on a property by 50% allowing them to collect up to $2,000 per unit of property that meets the certified energy-efficient standards.
In order to qualify for these credits, builders and contractors must apply and document their installments before the construction starts.
How Can You Qualify And What Would Be Included As An Energy Efficient Feature?
For the most part, any building that consumes energy at a lesser rate than the national energy standard has the potential to qualify for this credit. Residential and apartment buildings that were recently constructed or have undergone a good amount of reconstruction should highly consider looking into this credit. Even if construction or renovation happened in previous years and was not claimed on prior taxes, builders and contractors can still retroactively claim this credit.
So what are some energy-efficient features that would save this amount of energy for a property?
A few examples of energy-saving features would include:
- Wall insulation R-13+
- Roof insulation R-38+
- Foundations and slabs with extra insulation
- Vinyl low thermal emissivity windows
- Double or triple-pane windows
- Insulated exterior doors
- Reflective roofing materials
- Air conditioning with SEER (Seasonal Energy Efficiency Rating) of 13+
- Gas furnaces with at least 80 percent efficiency, or radiant heating system
How Can You Claim The 45L Energy Efficient Home Credit?
If you’re a builder, contractor, or property owner who has performed construction or renovation of single-family homes and low-rise residential buildings that have reduced energy consumption, contacting a team of tax experts to help guide you through claiming these credits will help you receive the maximum amount of money available to you.
At the National Tax Group, we are committed to helping people with this process. Call our team of tax professionals at (561) 257-3436 to set up a free consultation today.