Builders Still Have Time to Take Advantage of the 45L Tax Credit
Builders Still Have Time to Take Advantage of the 45L Tax Credit
Energy efficiency continues to play a growing role in residential construction, and builders have an important opportunity to benefit from the federal Section 45L Energy Efficient Home Credit. The credit provides tax incentives for builders who construct qualifying energy-efficient homes that meet specific performance standards.
Eligible builders can receive a federal tax credit for each qualifying home that meets the program’s energy efficiency requirements. Depending on the level of certification achieved, builders may qualify for up to $2,500 per home, or as much as $5,000 per home for projects that meet the DOE Zero Energy Ready Home Program.
To qualify, homes must meet energy performance standards verified by a certified third-party energy rater. In most cases, this involves certification through the ENERGY STAR Residential New Construction Program, which evaluates insulation levels, window performance, HVAC systems, air sealing, and overall building envelope performance.
Multifamily housing may also qualify and can receive higher credit amounts when projects meet prevailing wage requirements established under federal law. For builders already incorporating energy-efficient design practices, the credit can help offset construction costs while delivering homes that perform better for homeowners.
Important Deadline for Builders
Builders should be aware that the 45L tax credit is currently scheduled to expire on June 30, 2026. This means qualifying homes must be sold or leased before that date in order for builders to claim the credit.
Because the incentive applies per qualifying home, it can add up quickly for builders producing multiple homes each year. Even modest improvements in insulation, HVAC efficiency, air sealing, or window performance may allow projects to qualify for thousands of dollars in tax credits.
Builder Timeline: Key Dates for the 45L Credit
Now – Early Planning
Builders should work with a qualified energy rater to determine whether upcoming projects can meet ENERGY STAR or DOE Zero Energy Ready Home standards.
During Construction
Ensure homes incorporate the necessary energy efficiency components and documentation required for certification.
Before Sale or Lease
A certified energy rater must verify the home meets the required performance standards.
Deadline: June 30, 2026
The home must be sold or leased before this date for the builder to claim the 45L tax credit.
Looking Ahead: Green Built Texas
While the federal 45L credit provides valuable short-term incentives, the Green Built Texas program continues to provide a long-term pathway for builders who want to demonstrate leadership in energy efficiency and high-performance home construction.
The Dallas Builders Association encourages builders who have been participating in the Energy Star Program to begin transitioning to Green Built Texas certification as the Energy Star Program phases out. The program helps builders showcase energy-efficient construction practices, meet evolving consumer expectations, and differentiate their homes in a competitive market.
Builders interested in taking advantage of the 45L credit before the deadline should contact their CPA or Tax Advisor. Those who want to learn more about the Green Built Texas program are encouraged to visit the GreenBuiltTexas.com website.