| If you're a commercial real estate investor or related | | | | taken for prior tax years, if you made your |
| professional, knowing how to maximize profits and | | | | modifications previously, but didn't know you could be |
| decrease expenses is probably a priority. Making your | | | | eligible for the deduction. Multiple taxpayers may |
| property more energy efficient could help you save | | | | receive the deduction, but they must allocate the |
| money, and is a great idea in the long run. | | | | $1.80 per square foot among them. |
| Commercial properties account for a huge amount of | | | | If your building doesn't meet the standard of a fifty |
| power usage in this country. The more than four and | | | | percent or greater savings, it still might qualify for a |
| a half million government commercial buildings | | | | deduction. When buildings are certified to reduce |
| represent over sixty-seven billion square feet, and | | | | energy costs by sixteen and a half percent or more, |
| account for a quarter of our energy costs - | | | | they qualify for a deduction of sixty cents per |
| twenty-six billion dollars a year. Reducing energy | | | | square foot. |
| expenditure can help commercial real estate investors | | | | The government is dedicated to encouraging |
| save a lot, as the energy crisis looms. | | | | commercial real estate developers and owners to |
| The government wants to encourage builders and | | | | employ all the cost effective, sustainable and |
| investors to consider energy conservation seriously, | | | | technologically feasible strategies available for the |
| especially when new buildings are being designed or | | | | creation of more energy efficient buildings. They |
| constructed. That's why the Energy Tax Incentives | | | | want to encourage the use of energy alternatives |
| Act was enacted. This act was designed to reward | | | | that produce less carbon, and even to promote |
| conservation, in an attempt to combat the energy | | | | on-site energy. |
| crisis. It provides fourteen and a half billion dollars in | | | | Even though we're using more computers and other |
| subsidies and incentives for any project or action that | | | | energy consuming technologies in our commercial real |
| helps avoid producing greenhouse gases. | | | | estate sites, energy consumption in commercial |
| This piece of legislation could significantly improve | | | | buildings has decreased by twenty-five percent over |
| your cash flow, via the tax savings you'll get. That | | | | the past three decades. This is a great precedent, |
| adds an additional reason to make your commercial | | | | and one that we should continue to follow. |
| real estate a lot more energy efficient. You'll save | | | | Since retrofitting your building, designing new buildings, |
| money on operating costs, and you may be eligible | | | | or installing technology in existing sites to make them |
| for the energy efficient commercial building deduction. | | | | more energy efficient is a great opportunity, |
| This deduction should improve your cash flow, | | | | commercial real estate investors should pay attention. |
| allowing you to reinvest or divert those extra profits | | | | Greater energy efficiency can save you money, both |
| elsewhere. | | | | directly, and through tax incentives. |
| If you lease or own commercial buildings, including | | | | It might take twenty or thirty years for efficiency |
| residential buildings which have four or more stories | | | | increasing measures to pay for themselves through |
| above grade, retrofitting the property for greater | | | | energy savings. However, if you qualify for a |
| efficiency can make you eligible to deduct part or all | | | | deduction, that retrofit could pay for itself |
| of the costs associated with that retrofit. That | | | | immediately, giving you more cash to work with, and |
| means that the sometimes-high costs of making your | | | | allowing you to directly benefit from the energy |
| building more energy efficient can be dealt with | | | | savings. |
| immediately, rather than recovering them through | | | | What building upgrade is the most financially beneficial |
| depreciation over a much longer term. | | | | and easiest to perform? Lighting changes are |
| Not sure if your building will qualify? To get a partial | | | | generally considered the easiest and most lucrative |
| or full deduction, an energy efficient piece of | | | | upgrades. In the past decade, technologies have |
| commercial real estate must be located in the US, | | | | been developed that will not only help you cut your |
| and the new installation must be part of the HVAC | | | | costs by a third to two thirds, but will also reduce |
| system, hot water system, or interior lighting | | | | the environmental impact of your facility and improve |
| systems. It can also be part of the building envelope, | | | | the quality of your lighting. |
| including parts like exterior windows and doors, | | | | In new construction, installing lighting controls can |
| insulation and some roofing materials. The installation | | | | reduce energy consumption by at least thirty-five |
| must be certified to reduce your total power and | | | | percent, and by at least fifty percent in exiting |
| energy costs by at least half. | | | | buildings. That's a simple way to make your buildings |
| Calculate your power and energy consumption using | | | | more pleasant to work in and save money, too. |
| software programs approved by the IRS to receive | | | | If you're an investor or other professional in the |
| this deduction, and be sure to have a contractor or | | | | commercial real estate field, now's the time to start |
| engineer licensed in the building's jurisdiction certify | | | | looking at energy efficiency. Making the right changes |
| the property. If you meet these standards, you'll not | | | | can increase your buildings' efficiency, and get you |
| only enjoy savings from the changes you've made, | | | | valuable tax deductions, increasing your over all cash |
| you'll also get to deduct part or all of the expenses | | | | flow. If that sounds like a good idea to you, examine |
| involved in making them. | | | | your properties' energy usage. Chances are, you'll find |
| The maximum deduction available is $1.80 per square | | | | a place to improve efficiency and save. |
| foot of qualifying building area. This deduction can be | | | | |