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Energy Tax Credit for Builders

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Energy Tax Credit for Home Builders

A recent tax law change is designed to encourage homebuilders like yourself to build new energy efficient homes. You may be able to claim a $2,000 tax credit for each qualifying home you sell in 2006 and 2007. To get the credit, the home must be

  • Located in the United States .
  • Substantially constructed after August 8, 2005.
  • Certified as having met certain energy saving requirements.
  • Sold as a residence after December 31, 2005 and before January 1, 2008.

To meet the energy saving requirements, an “eligible certifier” must certify that the new home

Provides a level of heating and cooling energy consumption that is at least 50 percent below that of a comparable dwelling unit constructed in accordance with the standards the 2004 Supplement to the 2003 International Energy Conservation Code.

  • Has building envelope component improvements that provide for a level of heating and cooling energy consumption that is at least 10 percent below that of a comparable home.

For this purpose, heating and cooling energy and cost savings must be calculated in accordance with the procedures prescribed in Residential Energy Services Network (RESNET) Publication No. 05-001.

The IRS says that an ‘eligible certifier” is someone who is not connected to you and who has been accredited or otherwise authorized by RESNET (or an equivalent rating network) to use approved energy performance measurement methods. An employee or other representative of a utility or local building regulatory authority may qualify as an eligible certifier. In the case of builders who build at least 85 homes a year or build subdivisions with the same floor plan using the same subcontractors, the eligible certifier may use the sampling protocol found in the current ENERGY STAR for Homes Sampling Protocol Guidelines instead of inspecting all of the homes.

While you are not required to file the certification with your return, you must keep it with your other tax records. If you would like more information about the certification process, please contact us.

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