Most people would tell you that investing in real estate properties is a sure way to becoming successful in life, and in truth, this is correct, since there will always be a market for houses, apartments, condominiums, dormitories, old-age homes and facilities, and the like. Having your own home or a place to call home no matter how small or dilapidated it may be is a top priority for most people. It is guaranteed that you can sell a house in its present market value which is probably higher than the price you paid for, or just wait for the rent to come in every month or just lease the property for several years. But what people have not told you is that you still need to pay real estate property taxes for the given year you sold a property or for every year you had it leased. The larger and higher the value of the property, the greater your tax dues will be. This is why it is important to be able to find ways to save money on taxes which you can use in other projects or even save so you can buy another property in the coming years. A virtually unknown tax credit that provides for a $2000 tax credit for each housing unit is available for home builders and developers. The 45L tax credit was designed to provide a means for the builders to offset their expenses in making an energy-efficient home for themselves or other people. The tax credit is directed at those independent contractors and home builders who invest in energy-efficient materials and ecologically sound home designs. It is a known fact that designing and building energy-efficient homes does not come cheap, and the tax credit is a sort of reward for the builder to probably continue building more of these ecologically sound homes.
How To Save on 45L Tax Credits
There are many available tax credits out there for very specific purposes and situations, however, not many mention the 45L tax credits. This particular tax credit can be used by homebuilders and developers for a $2000 tax credit in the given year that the build was completed. The tax credit value is applied to the tax payable to the government thus it is a dollar-for-dollar benefit that will mean a lesser amount than it was before the tax credit. Thus, you get a generous two thousand dollars off from the total amount you should have paid to the government. The great thing about this is that the tax credit can be forwarded up to twenty years, and for a single home unit, that is already forty thousand dollars of savings. If you are a developer that owns a building with a hundred housing units in it, your 45L tax credit could substantially amount to two hundred thousand dollars in tax savings per year, and if you do not alter the building within the next twenty years then imagine how much that is in total. Money that was supposed to be paid for the tax liabilities can now be put to good use and in something else, like buying old houses and then transforming them into energy-efficient homes. It is hoped that with the money saved from having to pay taxes, more and more people will find it important to own an energy-efficient home. If you are renting out your property or leasing it out, it is still your property and you are liable to the government to make sure that taxes are duly paid. With energy-efficient homes, there is very little need for maintenance or upkeep and it means money saved from repairs and other maintenance work.
How To Claim Your 45L Tax Credit?
The procedure for filing a claim on 45L tax credit is not easy it requires having to work with a third-party contractor who will evaluate and assess your home or building if it is indeed energy-efficient. It is required that the third party will check on your building by using the IRS-approved modeling software to simulate the conditions of the home and provide evidence that the home meets the required criteria to determine if it will qualify for the 45L tax credit. If at present the inspectors were not convinced of any design element that can be identified as energy-efficient your application will then be automatically banned for lack of substance. This can be an opportunity for you to remodel or renovate the house so that it will become energy efficient and be able to get the tax credit that you deserve. On the other hand, if the building is old in need of repair, and abandoned then until the condition of the housing unit is improved, the tax credit will not be used. Once your home or building have been given the certification that it is energy-efficient, then the consultant needs his or her team to work further with the builder and determine that indeed the heating and cooling process only uses half of the energy and fuel consumption of houses that were made in the same year. Moreover, the building in itself should have a building envelope component improvement that when tested will only support the notion that it consumes about ten percent less of the energy consumed by the same building. When all of these have been satisfied, the builder can now proceed to file the actual claims with the local tax office. However, taking on this project by yourself and running a building at the same time can be quite a feat, that it is best to hire a team of experts that will do all that needs to be done so you can reap the 45L tax credit incentives. Hiring a new firm or a group of people can be daunting and expensive, but it can also be very useful in the sense that you do not need to do anything substantial, you can just wait for the results of the inspection and wait for the money to be credited to your annual tax returns.