Compliance with International Conservation Code Can Reap Tax Credits for Homebuilders, Savings for Home Owners
Did you know there are tax credits available for builders for building energy efficient homes? Here is information from the International Code Council.
The United States Congress recently passed the Job Protection and Recession Avoidance Act of 2012 (HR 8), which offers homebuilders a tax credit on newly constructed residential units that exceed the energy efficiency requirements of the 2006 International Energy Conservation Code (IECC) by 50 percent. A $2,000 tax credit is available to homebuilders who construct a home, apartment unit or multi-family dwelling as determined by RESNET or an equivalent rating or certification system.
HR 8 extends credits for energy efficient new homes and energy efficient appliances and the ability to claim non-business energy property tax credits for exterior windows, doors and skylights. Homes built to the 2012 IECC are expected to improve residential building energy efficiency by 30 percent more than those built under the 2006 edition, according to the U.S. Department of Energy. Many homes built to the 2012 IECC qualify for the tax credit referenced in HR 8 with current model HVAC equipment.
HR 8 includes a homebuilder tax credit for new residential units built between Dec. 31, 2011, and Dec. 31, 2013. The two-year extension is available with the credit retroactive for homes built in 2012 that meet the energy-efficiency requirements of the law.
For comparison purposes, the new legislation changed the baseline residence from a home meeting the 2004 IECC Supplement to a home that meets the 2006 IECC. The baseline for comparison of the HVAC, which is not included in the IECC, is 13 SEER and an HSPF of 7.7.
The criteria defined in the U.S. Tax Code comparing homes built to the 2006 IECC is currently exceeded by many state model codes, according to specialty tax consulting firms. One leading firm, for example, found that a 98-unit apartment building constructed in 2007 designed to the minimum requirements of the California energy code met the qualification for tax credits for the dwelling units in the building exceeding $190,000.
Section 401 of HR 8 extends the expired Existing Homes Energy Efficiency Tax Credit, which allows a tax credit for certain improvements meeting the prescriptive requirements of the 2009 IECC, with a limit of $500 over any amount previously claimed. This credit can apply to insulation, new HVAC equipment, windows and other equipment or systems that meet the prescriptive requirements in the 2009 IECC and specific requirements for HVAC efficiency.
The International Code Council is a member-focused association dedicated to helping the building safety community and construction industry provide safe and sustainable construction through the development of codes and standards used in the design, build and compliance process. Most U.S. communities and many global markets choose the International Codes, including the IECC.