How much is the 45L Tax Credit worth for multifamily projects?
What is the process for claiming 45L for multifamily projects?
The 45L tax credit is a home federal tax credit available to new construction multifamily and single-family projects that meet energy-efficiency building standards. It has been updated and extended through 2032.
Program Requirements Tax Credit Value ENERGY STAR MFNC * $500/unit ENERGY STAR MFNC + DOE Zero Energy Ready ** $1,000/unit ENERGY STAR MFNC + Prevailing Wage *** $2,500/unit ENERGY STAR MFNC + DOE Zero Energy Ready + Prevailing Wage $5,000/unit
* ENERGY STAR Multifamily New Construction
** DOE Zero Energy Ready: Department of Energy’s Zero Energy Ready Homes certification program
Do all units in a project have to qualify? Is it all or nothing?
Yes, ENERGY STAR needs all units to meet the requirements in order to achieve certification.
Who can benefit from 45L credits?
This Tax Credit is intended for multifamily and single-family builders and developers (not homeowners or tenants).
What types of buildings qualify?
Any residential buildings (single-family, multifamily, or manufactured homes) that meet the ENERGY STAR definition of a dwelling unit will qualify.
In this case, a dwelling unit is defined as a single unit providing complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation.
Can multifamily projects be retroactively eligible for 45L Tax Credits?
Potentially. ENERGY STAR can only be achieved on new construction or major renovations. If the project is undergoing renovation, reach out to us and we can help determine if it is being renovated enough to be eligible for certification.
When do new multifamily projects need to get started on ENERGY STAR or DOE Zero Energy Ready certification in the development process?
As soon as possible! We always like to say the earlier the better so we can get the requirements designed in, but ideally no later than CD’s
If you’re interested in qualifying for the 45L Tax Credit by pursuing ENERGY STAR or the DOE Zero Energy Ready Program, or are interested in more information about incentives for energy efficiency in general, please reach out to us today!