National Financing Opportunities for Green Building Green Communities offers grants, funding, tax credit capital and technical assistance to developers who meet the criteria for affordable housing that promotes health, conserves energy and natural resources, and provides easy access to jobs, schools and services. Starting in January, deductions will be available for buildings that improve energy efficiency by 25%. The amount of the deduction increases for every percentage point of energy efficiency above the 25% reference point. For more information on the revised calculation of the 179 D deduction, see our related article How the Inflation Reduction Act expands the deduction for energy efficient buildings.
With changes to the $179 deduction for commercial buildings and the $45,000 tax credit for homes, the law encourages the construction and renovation of energy-efficient buildings. Fortunately, federal, state, and local governments offer tax credits to help fund green building initiatives. Incentives come in many forms, including tax credits and deductions, repayments, low-interest loans, grants, bond programs, sales and property tax exemptions, and green building incentives. The best way to ensure that you discover and obtain all available credits for green commercial installations is to consult a tax specialist with experience in tax incentives for green buildings.
Under the North Carolina Green Building Incentive, certain locations, such as Mecklenburg County and the City of Asheville, will reimburse a portion of building permit fees for specific projects that promote energy efficiency or include eligible renewable energy technologies. Section 179D allows eligible building and business owners to receive an immediate tax deduction for the first year for a new or remodeled commercial building.
Building greencan be expensive at first, but if you look closely at environmentally friendly tax incentives, you can offset the price with substantial savings. The IRA offers many tax incentives to help commercial building owners reduce their energy use intensity (EUI) and invest in green technology.
The law has a direct impact on the real estate and construction industry, with new and expanded tax incentives for green building for anyone who builds or improves real estate.