Building Energy Efficiency Tax Credits 

In a recent letter to Congress, NAA/NMHC joined a diverse group of more than 80 stakeholders in urging Congress to add a new provision to the current energy tax incentive for energy-efficient buildings (Commercial Building Tax Credit, Section 179(d)).

As currently written, a property (new construction or retrofit) must demonstrate a 50 percent improvement over a specific version of the building code to take advantage of the credit. Since the credit became available, however, it has proven exceedingly difficult for building retrofits to meet these high performance standards. Thus, the credit is failing to provide the intended incentive for efficient building system upgrades. The NAA/NMHC letter urges lawmakers to instead establish a new tax credit to address improved energy performance in existing buildings. The proposal calls for a sliding scale of tax incentives based on demonstrable improvements in energy performance relative to the building’s pre-renovation performance. NAA/NMHC are also asking Congress to make it possible for REITs, which have a limited ability to benefit from tax incentives, to fully participate in the incentive.

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