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Federal Green Building Incentives: What Benefits Can I Receive on my CapEx?

 
Question:

Clay asks: My friend lives in a 160 unit 2 story condo "garden style" project in Dallas. It is a multifamily style structure and each one of the units are individually owned, although they have a central plant HVAC system. They need to replace their HVAC system and the HOA does not have the funds to do it...nor are they able to get the required funds from a local bank. If I were to provide the required capital (~$250,000), would I be eligible for a tax depreciation or other federal incentive benefit?

Answer:
Advice provided by: Matthew Rader, LEED AP, CBRE
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Hi Clay,

Unfortunately, because of the way the law was set up, low-rise condos and apartments are excluded from the 179D deduction.

Depending on where they are in Dallas, there may be some utility rebates but those are traditionally small in comparison to the cost of the central plant.

He could be eligible for credits for certain systems like geothermal or combined heat and power (co-gen) which is a 10% tax credit for either of those systems. He could also set up an entity to pay for credit eligible systems and lease them to the HOA or homeowners and that would allow him to capture the tax benefit and get reimbursed.

If you have more questions, feel free to give me a call... 214-762-5198

Matt

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