New Energy Efficient Home Tax Credit Renewed, Extended

With the two-year extension of all of the 2001 and 2003 Bush-era tax cuts as its centerpiece, Congress last week approved a major tax-cut package negotiated by President Obama and top Senate Republicans that is designed to provide tax relief for all working Americans and spur job growth.

H.R. 4853 — The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 — cleared the Senate by an overwhelming 81-to-19 margin on Dec. 15 and was approved by the House a day later by a vote of 277 to 148. The President sign the bill into law on Dec. 17.

For builders and developers considering building energy-efficient homes, this new law brings good news.

The New Energy Efficient Home Tax Credit (45L credit) for 2010 was renewed and extended it through the end of 2011. The section 45L tax credit is the only federal incentive available for efficiency in new home construction; about 10% of all new homes sold in 2009 qualified. The program provides $2,000 tax credits to builders and developers for the construction and sale of homes that achieve a 50% reduction in their energy consumption.

** The credit was renewed retroactively, so builders may be able to take advantage for Green Certified homes built this past year.

Click here to see more key points of the new law.