As a commercial building owner, you may find yourself between a rock and a hard place: you want to maintain a building that offers a comfortable and safe working environment for your tenants, but you also have to pay close attention to the expenses you incur to provide that kind of a facility.
An inefficient HVAC and Building Controls system can keep you from achieving both objectives. If your heating and cooling systems don’t work properly, your building won’t be a comfortable place to work. On top of that, an outdated system could be costing you extra money in utilities and repairs.
Here’s good news you may not be aware of. In December of 2015, the House and Senate passed a provision known as the PATH Act (Protecting Americans from Tax Hikes Act of 2015). Section 179D of this Internal Revenue Code could save you thousands in tax deductions through energy-savings initiatives. Commercial building owners are eligible for up to a $1.80 tax deduction per square foot for energy savings improvements made to their buildings.
This tax relief incentive applies to the design and installation of energy-efficient interior lighting, HVAC, hot water or building envelope systems in commercial buildings. That means you can get a tax break when you design and install a new system that will work more efficiently and enhance the quality of your building’s work environment. You can make capital improvements without touching your own capital.
The Energy-Efficient Commercial Buildings Tax Deduction is available to building owners and lessees who make energy-efficient improvements to their commercial buildings, including:
- Retail buildings
- Office buildings
- Industrial buildings
- Apartment buildings (at least four stories)
- Warehouses
What if your building is owned by a nonprofit organization? You can benefit by having the energy advisory and installation firm provide a credit back on the project for the tax deduction. That’s great news for buildings such as:
- Schools/Universities
- Libraries
- Town halls
- Airports
- Transportation facilities
- Post offices
- Courthouses
- Military bases
- Government offices
You don’t have to put off building improvements because of the expense. By taking advantage of legitimate tax breaks, you get the benefit of a building that’s more attractive to tenants, and your tenants enjoy a building that’s more comfortable and efficient. And that can lead to less tenant turnover.
