Section 45L Credit - Section 45L

Section 45L Tax Credit

Recent tax legislation extended the Energy Efficient Home Credit which offers a 45L Tax Credit of $2,000 per dwelling unit to developers of energy efficient apartment buildings and homes.

Eligible 45L Tax Credit Apartment Buildings & Condos:
A dwelling unit should provide a level of heating and cooling energy consumption that is significantly less than certain national energy standards, dependent on when the unit is sold or leased. Based on current construction trends, many developments already exceed these standards. Given that current energy codes have evolved tremendously over the past five years, many developers are already building to specifications that would meet the criteria for this credit. All apartment buildings and residential condominium developments completed within the last 4 years are worth assessing for potential 45L tax credits. Eligible construction also includes substantial reconstruction and rehabilitation. Developers can still claim the 45L tax credit retroactively if they did not claim them on previous tax returns.

Who can benefit?

Apartment, Condominium, and Single-Family Residence Developers.
The Energy Efficient Home Credit offers a tax credit of $2,000 per dwelling unit to developers of energy efficient buildings completed after August 8, 2005. The following types of projects should be considered:

▪ Affordable housing (LIHTC) ▪ Rehabilitation
▪ Apartment buildings ▪ Residential condominiums
▪ Assisted living housing ▪ Student housing
▪ Production home developments ▪ Substantial reconstruction

Sample Benefits:

▪ 50 qualified units = $100,000 in 45L tax credits
▪ 100 qualified units = $200,000 in 45L tax credits
▪ 1000 qualified units = $2,000,000 in 45L tax credits

Do you qualify for 45L?

Find out if you’re eligible for the 45L Energy Tax Credit worth $2,000 per dwelling unit. You may qualify if you have developed, constructed or substantially renovated an apartment, condominium or single family residence with 15 units or more since 2006.



Case Study

Garden Apartments
Apartment building with 55 units in Danville, CA. 100% of the units barely passed the 2005 T24.
Unit specs:
▪ HVAC: 13.0 SEER A/C & Hydronic Heat
▪ Insulation: R-13 wall, R-38 attic
▪ Windows: U-Factor 0.39, SHGC 0.38

Results: $110,000 in 45L Tax Credits

Village Apartments
Apartment building with 205 units in Plover, WI.
100% of the units passed despite inefficient cooling systems. Unit specs:
▪ HVAC: 9.4 SEER A/C & gas furnace
▪ Insulation: R-19 wall, R-49 attic
▪ Windows: U-Factor 0.32, SHGC 0.32

Results: $410,000 in 45L Tax Credits

The Process

The basis for developing and supporting the 45L tax credit is a detailed energy analysis that must be certified by a qualified third-party. Our multi-disciplinary team of engineers and tax experts will ensure that you obtain the maximum tax credits and provide all the documentation necessary to sustain an IRS audit. We use IRS approved software programs for the IRC Sec. 45L certification.

Claiming the Credit

We offer a complimentary feasibility assessment that will illustrate how you can benefit from the 45L tax credit. To get started on a feasibility assessment fill out the 45L form or call one of our experts.

Meet the Experts

KBKG experts are published authors, national speakers and industry leaders with years of experience.

CJ Aberin, CCSP
Principal » Biography

Brandon Val Verde, CEPE
Senior Manager » Biography