The Tax Benefits For Making Your Building Energy-Efficient


Hi, this is Julio Gonzalez with Engineered Tax Services. I wanted to talk to you a little bit about tax benefits by making your building energy efficient. Whether you design your building energy efficient, are you retrofit your building to be energy efficient, there's tax benefits associated with that. Most people take advantage of the utility incentives and maybe some state and local incentives. But most people overlook the federal tax incentives for making real estate investments. energy efficient, so let's go into a couple of those ones. The first one is 179 D. 179 D is a tax benefit for building owners that make their buildings energy efficient, and that tax benefit can be up to $1 80 per square foot. That dollar 80 per square foot is broken down into three buckets. 60 cents per square feet, the lighting Energy Efficiency, HVAC energy efficiency, and building envelope which is the roof, the walls, the insulation. So if you make a building energy efficient in any one of those areas, you could be eligible up to 60 cents a square foot. If a complete building is energy efficient, it can be up to $1.80 square foot. And we go through and independently verify that as a licensed engineering firm to determine the energy consumption versus the standards. And if you beat those standards, which most people today do, then you would qualify. So again, your route you should be rewarded for making your building energy efficient. This tax incentive is to help building owners have a quicker payback on investing and making their building energy efficient. So if you have any questions, go to our website at or you can and we'll get you the information that you need. Now one other thing, the 45L is a tax credit, tax credit for making, you know, multifamily energy efficient four storeys, and under that is $2,000. A unit kind of the same methodology applies as it doesn't 179 D, but it's a very powerful tax benefit that goes to the developer of those projects. So for developers, you know, here's a great incentive to make your communities that you're building energy efficient. And we do a lot of that. I did want to mention on the 179 D that tax benefit goes to the building owner, not the developer. Now 179 D also gets carried over to the architects and designers for government buildings for public buildings where that entity doesn't pay taxes. So if you're an architect and engineer, a general contractor, and you've designed a building energy efficient or retrofitted a building energy efficient, you're also eligible for that tax benefit. Certainly that MD has to confirm that you were the designer of record. But then we also do our measurements and calculations to make sure that it qualifies under the federal guidelines. And it can be a substantial tax benefit that we see as partners with the AI. A lot of architects take advantage of, and a lot of engineering firms and general contractors. So I hope that's helpful. Again, Thanks.

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