Commercial Observer Urges Real Estate to Utilize Tax Credits

Real Estate and <a href="">tax credits</a>

Real Estate Industry: Seize the Opportunity of tax credits for Energy Efficiency

Maximize Your Benefits

Congress is currently providing the real estate industry with billions of dollars in tax incentives to promote the construction of energy-efficient homes and offices, as well as the retrofitting of existing buildings. These unprecedented tax breaks have the potential to bring significant advantages, but many firms have yet to take advantage of them.

Don’t Miss Out

Now is the time to include these federal funding opportunities in your plans. Waiting can lead to missed benefits, as these credits mostly take effect with occupancy. The process of going from design to completion can take years, so it’s crucial to plan ahead and incorporate these incentives into your pro formas today.

Stay Informed

One reason for the slow adoption of these incentives is a lack of awareness. The Inflation Reduction Act, which expanded these credits, is relatively new, and federal agencies are still finalizing guidance on its implementation. However, staying informed about the broad outlines of these incentives is essential for effective planning.

Embrace Green Building Technologies

One of the barriers to utilizing these incentives is the unfamiliarity with green building technologies. Many builders are hesitant to introduce these technologies due to concerns about financing, planning, and construction. However, it’s important to recognize that decarbonization technologies are the future and can lead to higher-performing buildings that consumers demand.

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Marta Schantz and Kara Kokernak.

Address Climate Change

As the real estate industry, it is crucial to take a leading role in fighting climate change. Buildings are responsible for 40 percent of global carbon emissions. By adopting energy-efficient and sustainable practices, real estate professionals can make a significant impact and meet consumer demands.

Overcome Financial Hurdles

One of the obstacles to energy efficiency upgrades is the upfront cost. Retrofitting large buildings can be expensive, but the Inflation Reduction Act (IRA) has made significant changes to mitigate these concerns. The IRA offers improved tax incentives, reducing the overall investment required for energy efficiency upgrades.

Ensure Long-Term Deductions

Section 179D of the tax code, created in 2005, provides tax deductions for energy-efficient retrofits. However, the deduction required frequent reauthorization, leading to uncertainty for developers. The IRA has addressed this issue by making changes to Section 179D, including permanent eligibility and increased deduction amounts.

Unlock New Opportunities

The IRA has also expanded tax credits for energy efficiency and renewable energy investments. These credits now cover exciting new technologies and offer additional incentives for installing them in low-income areas and paying workers a prevailing wage.

Read More of this Story at – 2023-10-24 13:30:39

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