Some framework is in place for green building tax deductions at both the national and the lower levels. At both the federal level and local level, tax benefits exist to help promote green buildings in Houston. These benefits not only affect owners, but some can also apply to the designers.
Federal Incentive- EPAct §179D Tax Deduction
As part of the Energy Policy Act of 2005, the EPAct §179D Tax Deduction allows energy efficient construction or retrofitting expenses to be deduced for buildings in operation after December 31, 2005 and before January 1, 2014. These may include lighting, HVAC, hot water systems, and building envelope. If such systems are installed and reduce the total energy and energy costs of the whole building by 50%, a maximum of $1.80 per square foot (of the area affected by an efficient system) can be deducted.
The beneficiary of the deduction is the company or person who pays for construction, typically the owner. However, if it is a government owned building, the designer (architect, engineer, environmental consultant, or energy service provider) can benefit from this tax deduction. If the Better Building Initiatives proposed by President Obama become reality, then the tax deductions will become tax credits, potentially doubling the incentive.
For more information, please see http://www.sourcecorptax.com/energy/energy_efficiency.htm
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US40F&re=0&ee=1
Harris County Green Building Tax Abatement for LEED
An owner of a new building that has registered and is pursuing LEED Certification can receive a partial tax abatement for up to ten years after construction is complete. This ranges from 1-10% , depending on the certification level.
| LEED Certification Level | Tax Abatement |
| Certified | 1.0% |
| Silver | 2.5% |
| Gold | 5.0% |
| Platinum | 10% |
Before construction is completed, the application for a LEED Certification Tax Abatement is due. The amount spent on LEED related building components must be $100,000. Once processed and approved, one can receive the benefits for up to 10 years. This applies to projects outside of the incorporated area.
Harris County Guidelines: http://www.hctx.net/CmpDocuments/103/Economic%20Development/2008-05-20%20Approved%20Tax%20Abatement%20Guidelines.pdf
City of Houston, Texas, Ordinance No. 2009-858: Leadership in Energy and Environmental Design Tax Abatement
Like the Harris Country Tax Abatement, an owner of a new building that has registered and is pursuing LEED Certification can receive a partial tax abatement for up to ten years after construction is complete. For the percentage discounts available, these are the same as the Harris County Tax Abatement. Before construction is completed, the application for a LEED Certification Tax Abatement is due. The amount spent on LEED related building components must be $100,000. Once processed and approved, one can receive the benefits for up to 10 years.
Please note, a building can only take advantage of the city or the county tax abatement, not both.
http://www.codegreenhouston.org/tax-incentive-rebates/index.php