Owners of commercial real estate also have access to significant federal tax incentives for making energy efficiency improvements. The incentive are available for existing buildings that are renovated of retrofitted, and newly constructed buildings. Though the tax benefits are intended primarily for real estate owners, commercial property tenants who pay for energy improvements may be eligible as well.
The primary building components eligible for federal tax benefits in commercial buildings are:
*heating, cooling and water heating systems
*interior lighting equipment
*building envelope improvements (e.g. energy efficient doors, windows, insulation in the roof and exterior walls.
To qualify, the renovated property must meet the ASHRAE 90.1-2001 building standard, and be placed in service no later than December 31, 2016.
ASHRAE refers to the American Society of Heating, Refrigeration and Air-conditioning Engineers; the ASHRE 90.1 standard is that group’s detailed technical requirements for energy efficiency in commercial and other buildings except low-rise residential properties. See www.ASHRAE.org for additional information.
Detailed guidance on claiming deductions, including certifications of improvements, can be found in the IRS Revenue Bulletin 2006-52 and IRS Notice 3008-40 available on the IRS website