H.R. 2454 The American Clean Energy and Security Act

There has been a lot of confusion about H.R. 2454, The American Clean Energy and Security Act.  In fact some of the biggest “names” in real estate investing were announcing a few weeks ago that it was pretty much the end of the world as we know it.  The original bill has improved a bit and credit should be given to the National Association of Realtors who were instrumental in making positive changes to excluding existing real estate from the bill. Changes to the House approved bill include:

* The bill does not create a federal energy audit requirement for real property;
* Existing homes and buildings are exempt under the federal guidelines for new construction energy efficiency information labels.
* No labeling may be done during a sales transaction.
* States can decide if they want to require energy audits, disclosures, etc.
* Property owners can take advantage of significant financial incentives such as matching grants to make energy improvements to their property and reduce their energy bills;
* The EPA is prohibited from regulating residential and commercial real estate under the Clean Air Act;
* Eliminated a provision allowing individuals to sue over minor climate risks under the Clean Air Act; and
* Establishes green building incentives for HUD housing which includes grants, loan and credits for renewable energy upgrades.

What’s in Store?

This bill has been passed in the House. The bill now goes on to be voted on in the Senate. Once the Senate passes the bill, then the House-Senate conference committee will meet to reconcile the differences so the law can be enacted.

Energy Tax Credits for Rental Properties… Kind Of

Of course, there’s still no goodies for true investment property but you can get tax credits for a second home that is rented out part of the year.   You can get credit for the following 4 products for a portion of the time you live in the home:

· Geothermal Heat Pumps

· Solar Panels

· Solar Water Heater

· Small Wind Energy Systems

If you live in your home less than 80% of the year, you get a tax credit for the percentage of the credit time you spend there. So if you are there 6 months, you can take 50% of the 30% tax credit for consumer energy efficiency up to $1,500, by December 31, 2010.

Not the best but hey, it’s something.