Montgomery County Sunsetting LEED Certification Tax Credit; Interested Building Owners Must Submit ‘Intent to Apply Application’ by January 2022 Deadline

May 17, 2021
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Montgomery County’s Department of Environmental Protection (DEP) and Department of Finance are notifying building owners interested in pursuing the County’s property tax credit for LEED-certified commercial and multifamily buildings to submit their application, or notify the County of their intent to apply, by Jan. 1, 2022.

In September 2020, the County established a new Energy-Efficient Buildings property tax credit to improve the energy efficiency of existing and newly constructed buildings.

The innovative Energy-Efficient Buildings property tax credit program aligns with the County’s ambitious climate goal of eliminating greenhouse gas emissions by 2035 by shifting the primary focus of incentives from building certifications alone to proven energy reductions. The two-tier incentive program design is the first of its kind in the nation.

Offering energy-efficiency incentives to building owners is a key component of the County’s Climate Action Plan that is focused on reducing greenhouse gas emissions from the commercial and multifamily built environment. The property tax program also allows building owners to prepare early for pending Building Energy Performance Standards and more stringent building code requirements, such as the 2018 International Green Construction Code.

The Energy-Efficient Buildings property tax credit program structure was developed in partnership with the private sector and nonprofit organizations. The stakeholders concurred that the balanced incentive approach—paired with other County energy programs, incentives and financing options—will maintain the County’s leadership in the sustainability space while bolstering its economic base with greener commercial building stock.

The original stakeholder workgroup recommendations report can be found here.  More information about this new property tax credit and application forms will be released in the coming months.

As part of the establishment of the new Energy-Efficient Buildings property tax credit, the current property tax credit for energy and environmental design awarded to commercial and multifamily properties for earning qualified LEED Certifications will be retired.

Key dates for building owners to know to qualify for the current tax credit include:

  • Any building owner who is pursuing property tax credit for energy and environmental design for a LEED certified commercial or multifamily building must either submit a completed application with their LEED Scorecard, or submit an Intent to Apply Application form, by Jan. 1, 2022.
  • After Jan. 1, 2022, only buildings that appear on the Intent to Apply list will be eligible to receive the sunsetting property tax credit for energy and environmental design.
  • Eligible buildings pursuing a LEED-Existing Buildings credit will need to submit their completed application with the LEED Scorecard no later than Jan. 1, 2023.
  • Eligible buildings pursuing a LEED-Core and Shell or LEED-New Construction credit will need to submit their completed application with the LEED Scorecard no later than Jan. 1, 2024.

After Jan. 1, 2024, any commercial or multifamily building seeking a tax credit for its high-performance building will be directed to the new Energy-Efficient Buildings property tax credit. The process, as recommended by stakeholders, ensures that building owners that made business decisions based on the existence of this incentive will be able to earn the credit in a reasonable amount of time.

Access for the application form for the property tax credit for energy and environmental design can be found here. The Intent to Apply Application form can be found here. Information about the sunsetting property tax credit for energy and environmental design is available here.

For more information about the new Energy-Efficient Buildings property tax credit, contact energy@montgomerycountymd.gov or sign up for DEP’s Commercial Energy News email list for updates. Questions about submitting property tax credit applications can be directed to the County’s Division of Treasury in the Department of Finance at 240-777-0311.



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