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Fleming Advisors multifamily tax & accounting professionals have experience in helping owners and developers secure various types of tax credits for their multifamily developments.

Section 45L Tax Credit

Newly constructed or renovated apartments and condominium developments of three stories or less that meet certain criteria are eligible for a $2,000 credit per unit under section 45L of the Internal Revenue Code.

Eligible 45L Tax Credit Apartment Buildings & Condos

‍A dwelling unit should provide a level of heating and cooling energy consumption that is significantly less than certain national energy standards, dependent on when the unit is sold or leased. Based on current construction trends, many developments already exceed these standards. In fact, most developers are already building to specifications that would meet the criteria for this credit.

All apartment buildings and residential condominium developments completed within the last four years are worth assessing for potential 45L tax credits. Eligible construction also includes substantial reconstruction and rehabilitation. Developers can still claim the 45L tax credit retroactively if they did not claim them on previous tax returns.

The potential benefit to an owner or developer is significant.  For example, on a 200-unit project to potential tax benefit is $400,000.  On a 350 unit community, the tax credit is $700,000.

The Process

The basis for developing and supporting the 45L tax credit is a detailed energy analysis that must be performed certified by a qualified third-party. We have assembled a multi-disciplinary team of engineers and tax experts will ensure that you obtain the maximum tax credits and provide all the documentation necessary to sustain an IRS audit. Our team uses IRS approved software programs for the IRC Sec. 45L certification.

Claiming the Credit‍‍

We offer a complimentary feasibility assessment that will illustrate how you can benefit from the 45L tax credit. Contact us to learn more or begin the process.

Section 179D Tax Credit

Similar to the Section 45L Tax Credit program, the Section 179D tax credit is a tax incentive that relates commercial buildings of all types and residential housing that is four or more stories.  Key criteria are the design and installation of energy efficient interior lighting, HVAC, hot water, or building envelope systems. Through this incentive found in section 179D of the Internal Revenue Code, qualifying businesses can receive up to $1.80 per square foot in deductions for eligible projects placed into service any time from 2006 to 2015.

Who can qualify?

The Energy-Efficient Commercial Building 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 4 stories)

  • Warehouses

In addition, designers of government-owned buildings can also get the benefit under a special rule for public property! Eligible designers include architects, engineers, contractors, environmental consultants or energy services providers who have contributed towards the energy efficiency for new government buildings or renovations/retrofits/additions of existing government buildings such as:

  • Schools

  • State universities

  • Libraries

  • Town halls

  • Airports

  • Transportation facilities

  • Post offices

  • Courthouses

  • Military bases

New Markets Tax Credit Financing

If you have a mixed-use project that needs financing in a low-income community, New Markets Tax Credits (NMTC) might be the answer. NMTC projects include real estate investments that are up to 79 percent residential.  NMTC equity deals are typically non-traditional with more flexible terms than conventional financing. As a result, borrowers benefit from below market interest rates and underwriting terms.  Many NMTC deals fund transactions that either could not qualify for any conventional financing, or could not qualify for enough conventional financing to cover the entire cost of the project.


Contact us to learn more or begin the process.

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