Energy Tax Incentives For Commercial Property Owners - Frequently Asked Questions:
Q. What are Energy Tax Credits?
A. An Energy Tax Credit is a deduction given to commercial property owners for building or retrofit for "GOING GREEN" which means improving the energy efficiency of their existing commercial buildings or designing energy efficiency into new buildings.
Q. Where did they come from?
A. Congress passed legislation in August of 2005 to incentives property owners to build energy efficient real estate properties to promote reduction in energy consumption.
Good news, on October 3rd, 2008, the energy bill was extended to December 31st, 2013.
Q. What is this Policy Called?
A. The Energy Policy Act of 2005. The Energy Policy Act Brings New Tax Incentives for Real Estate Investors.
The Energy Policy Act of 2005 is a very important new tax act for building owners. Real estate investors can now reduce the payback period in investing in energy-efficient components with the added benefit of deducting up to the entire expense of these assets immediately versus depreciating these assets over 39 years.
Q. What is the amount of the energy tax credit?
A. The rulings allow up to a $1.80 per sq. ft. tax deduction for commercial property owners.
Q. Why was this Energy Policy Act enacted?
A. The Energy Policy Act of 2005 includes a tax deduction for investments in "energy-efficient commercial building property" designed to significantly reduce the heating, cooling, water heating, and interior lighting energy cost of newer existing commercial buildings. Tax deductions reduce your overall taxable income with the value of the deduction dependent on your tax bracket. Tax credits, such as the ones provided for consumers in the 2005 Energy Policy Act, reduce the amount of tax you owe dollar for dollar.
Q. Who would be ideal candidates for the Energy Tax Credits?
A. New Construction - Energy Efficiency in mind by Owner (50,000 sq. ft. and above).
RetroFits - Lighting
Green Buildings
LEEDS Certified Buildings