The 45L tax credit for residential properties received another seal of approval this year when the Senate Finance Committee gave it a new lease of life through the passing of the Expiring Provisions Improvement Reform and Efficiency Act, otherwise known as (EXPIRE Act). This took place on the 3rd of April 2014 and it lay to rest all the speculation and anxiety that had gripped various interested stakeholders due to the expiration of a host of tax incentives totaling over 50. According to the provisions contained in EXPIRE, the 45L Credit for energy efficient new homes is now being extended to homes that were acquired before the 1st of January 2016.
What Exactly Is The 45L Tax Credit?
As the world moves to combat global warming through various mechanisms, energy efficient building has come to the fore as one of the weapons in the arsenal. There are separate provisions meant to encourage property developers and owners to go green in the construction or remodeling of their properties to help in the fight to save the environment for posterity’s sake. The 45L Credit does just that through rewarding investors, developers, etc.
The tax credit is covered under Section 45L of the Internal Revenue Code and is given a fresh lease of life yearly through various reauthorizing pieces of legislation. The tax credit that you stand to benefit for each qualifying owner occupied or rented housing unit is equal to $2000, 00.
In order for a housing unit to qualify, it has to meet prescribed levels with respect to energy saving. The definition of a housing unit is broad and covers townhouse, detached house, and even an apartment in an apartment building. The qualifying buildings cannot be more than 3 stories above the right grade. The energy saving measurement has to be at least 50% below the consumption of a similar housing unit that has been constructed according to 2006 International Energy Conservation Code. Out of this saving, at 10% must be attributable to the building envelope and an engineer will be require to certify the status of the property.
You can get guidance on issues pertaining to this and other tax credits online from professional tax companies. It is vital that you find a reliable company with impeccable experience and glowing reviews form other consumers who have dealt with it before. Make a s top at the better business bureau to ascertain whether there have been any complaints lodged against the company