Tax Credits for Commercial Building Design

Did you know that you might be eligible for $1.80 per square foot tax deduction if you improve energy efficiency while designing your new commercial building? To qualify, building owners should make investments which will help bring down energy costs by over 50%. Taxpayers including commercial developers, homebuilders and anyone trying to improve commercial buildings are likely to benefit from these legislations.

Tax Incentives for Going Green

The Energy Efficient Commercial Building Tax Deduction is applicable until 31 December 2013. Section 179D (Commercial developers, real estate investors and architects) offers a depreciation deduction of anywhere between 30 cents to $ 1.80 per square feet for improvements which qualify in commercial buildings post 1 January 2006. Categories include heating, ventilation, air-conditioning and lighting systems. You need a licensed professional engineer to certify that a detailed energy analysis (as per IRS requirement) was conducted. It also requires a statement of how the calculations were performed for the various equipments or material used. Taxpayers who have made improvements to 50,000 square feet or more of their property, are LEED certified or even Energy Star buildings in utility rebate programs are ideal candidates to avail these credits.

As the move towards sustainable and environmentally friendly building design gains momentum, there are a number of credits and deductions in store for builders. The Section 48 (Energy Credits) helps those who invest in solar energy. It provides 30% tax credit and is applicable to all property placed in service post 31 December 2005 and before 1 January 2017. Professionals can help you with comprehensive information on state and federal policies. And while you choose to reduce the tax you owe, you can help save the environment also.