Make Local Law 97 a little less taxing: Tax incentives for condos and co-ops
Diving headfirst into Local Law 97, you might be daunted by the load of requirements and potential financial implications. Sure, we’ve talked extensively about Local Law 97 financing opportunities (don’t miss our detailed guide), but the treasure trove of tax incentives, particularly under the Inflation Reduction Act, is where your attention needs to be. Designed for condos and co-ops these incentives can significantly offset the cost of your building sustainability endeavors.
A sneak peek into the world of tax incentives
By investing in energy efficiency upgrades, renewable energy sources, and green infrastructure, you're not just playing your part in climate action but also inviting a world of tax incentives. Sounds like a pretty good deal, right?
The Inflation Reduction Act (IRA) of 2017 expanded tax credit opportunities for residential buildings, including condos and co-ops. Let's explore some of them:
1. Energy Efficiency Improvement Credit (EIC)
Born out of the Energy Policy Act of 2005, EIC can be claimed by owners of residential buildings making energy efficiency improvements. With the IRA upgrade, you can redeem up to $0.25 per square foot for improvements that meet certain requirements, including:
- The building is at least three years old
- Improvements target the building's envelope, including walls, roofs, and windows.
- All modifications meet energy efficiency standards
- Qualified contractors undertake the improvements
Here are some projects that can help you qualify for EIC:
- Insulation: Want to cut down on heat loss and amplify energy efficiency? Try installing insulation in the walls, roof, and attic of your building.
- Windows and Doors: Give your old, inefficient windows and doors a makeover by replacing them with their energy-efficient counterparts.
- Weatherstripping: Say goodbye to air leaks by installing weatherstripping around doors and windows.
- Air Sealing: Seal up your building's envelope with air sealing and improve energy efficiency.
2. Residential renewable energy tax credit
Since the Energy Improvement and Extension Act of 2008, this tax credit has been a boon for residential buildings installing renewable energy systems, such as solar panels or geothermal heat pumps. Claim up to 30% of the cost of the system, with a cap of $2,600.
More than just tax credits
Beyond tax credits, numerous financial incentives are waiting for you, from grants and loans to rebates. Work with your property manager and a tax advisor to ensure you've got your bases covered.
The New York State Energy Research and Development Authority (NYSERDA) also has a suite of programs tailored to help residential buildings improve their energy efficiency and pare down energy bills, including:
1. NYSERDA's Residential Assistance Program
This program helps homeowners and renters, including those in condos and co-ops, make energy efficiency improvements through:
- Rebates for a variety of energy efficiency improvements, like insulation, windows, and lighting
- Loans to finance energy efficiency upgrades
- Technical assistance to identify and implement the improvements
2. NYSERDA's Multifamily Retrofit Program
For buildings with five or more units, including condos and co-ops, this program provides grants and loans to help owners enhance their buildings' energy efficiency.
As if that wasn't enough, the New York City Department of Buildings (DOB) stepped in with its programs to help condos and co-ops with Local Law 97 compliance. The Green Homes Program and the Energy Efficiency Rebate Program provide incentives and rebates to owners making energy efficiency improvements and installing energy-efficient appliances and equipment, respectively.
Local Law 97 will make buildings run better, cleaner, and smarter (and help the planet). It doesn’t mean the upfront work won’t be expensive! These tax incentives and other financial incentives help make compliance easier. A strategic partnership with the right property manager to guide your building's Local Law 97 compliance and secure optimal savings is the key to success. Our experienced project management team at Daisy is ready to help you save green while going green.
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