As Congress begins its consideration of comprehensive tax reform, we at Arcxis, a leading provider of third-party inspections and certifications, urge you to recognize the benefits of the New Homes Energy Efficient Tax Credit (IRC Section 45L). The policy has successfully supported builders to construct more energy-efficient properties, providing homeowners with significant utility cost savings, ultimately helping with the affordability of home ownership.
Given the current housing affordability crisis, it would be counterproductive to eliminate this initiative that incentivizes builders to invest in reducing homeownership expenses. Our experience shows that the overall performance of homes achieving the 45L tax credit has improved dramatically in the recent passage, and its integrity has notably improved as it aligned with federal certification programs. The 2022 changes made the credit available to homebuilders who certify to the Energy Star for Homes Program ($2,500) or the Department of Energy's Zero Energy Ready Homes program ($5,000). We request that the Committee compare the performance results of the 45L credit prior to 2022 with the score for subsequent years, where data is available, following these amendments to see the improvements in home performance required to qualify.
In summary, we hope the Committee will avoid eliminating this effective, and bipartisan, tax incentive while reviewing other policies that have not delivered constant results for the American taxpayer. We encourage the Committee staff to seek input from various stakeholders, including large homebuilders, who have successfully utilized this tax credit. Recognizing the value of the 45L tax credit, to the housing industry and the American Homebuyer in enhancing overall housing stability and affordability, should be an integral part of any comprehensive tax reform review.
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