Green building credits going fast

Posted: 11:35 am

New Mexicos popular tax credits to promote green building appear to be heading into their final year of availability for residential construction despite being renewed through the end of 2016.

Demand for the Sustainable Building Tax Credit program, which is administered by the Energy, Minerals and Natural Resources Department, has been so strong that the residential allotment for the 2014 tax year is long gone. The 2015 allotment is currently being distributed.

We will probably start issuing residential tax credits before the spring equinox (March 20) for tax credit 2016, the last authorized tax year for the program, said Ken Hughes of the departments energy conservation and management division.

The current pace of demand for the residential credits points to them being used up by the end of this year.

The residential tax credits are available for the construction of detached single-family homes and require certification through either the Build Green New Mexico or the Leadership in Energy and Environmental Design programs.

Introduced in 2007, tax credits were set to expire at the end of 2013 but were extended through 2016.

The extension by the state Legislature reduced the total amount of residential credits from $5 million a year to $4 million this year, Hughes said. In addition, apartment construction was shifted from the residential category to the commercial tax credit category.

The extension also reduced the total amount of tax credits for commercial construction from $5 million to $1 million this year. Demand for the commercial tax credits has been weak two-thirds of the 2013 allotment are still available due to the sluggish economy.

As a general rule, homebuilders pass along most or all of their cost savings from the tax credits to homebuyers.

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Green building credits going fast