Program Overview
- Per-square-foot tax credit for the construction or renovation of qualifying residential or commercial buildings that meet specific building standards.
- Available through December 31, 2027.
- While this credit is named the “2021 Sustainable Building Tax Credit,” projects built in 2021 and years beyond can be eligible.
Who is eligible?
- Individual and corporate taxpayers who own a building at the time it is certified as “sustainable,” or subsequent owners if no credit has already been claimed.
What is offered?
- Per-square-foot incentives of up to $6.50, based on building type and certification achieved.
How can I apply?
- Construct or renovate a qualifying building and achieve an eligible
“sustainable” certification. - Apply for a certificate of eligibility from the Energy, Minerals and Natural Resources Department.
- Include the certificate of eligibility when filing state income taxes.
Sustainable Building 2021
Manufactured Home
An application for the 2021 Sustainable Building Tax Credit must contain the following information as attachments:
- Warranty deed (a property tax bill that provides proof of physical address, legal description, and name of owner)
- New Mexico Regulation and Licensing Department (NMRLD) permit and Manufactured Housing Division (MHD)
- Energy Star Certificate
- Home performance specification summary
- Home Floor Plan with Square Footage
- Energy Star Installation Checklist
- EMNRD Supplemental Verifier Certification form
Residential Home
A residential application for the 2021 Sustainable Building Tax Credit must contain the following information as attachments:
- Warranty Deed (or a property tax bill that provides proof of physical address, legal description, and name of owner)
- EMNRD Supplemental Verifier Certification form
- Certificate of Occupancy issued by Building Code Authority
- Build Green New Mexico (BGNM) Certificate
- HERS Reports:
- HERS Certificate
- HERS Building Summary
- HERS Emissions
- HERS Fuel Summary
- HERS 2021 IECC Building UA Compliance
✅ Tip: Each of these documents serves to verify compliance with energy efficiency standards and ownership requirements. The HERS and IECC reports demonstrate that the home meets or exceeds the 2021 IECC code and energy performance benchmarks, which are central to qualifying for the tax credit.
Commercial / Multi-Unit Building
A commercial /multi-unit application for the 2021 Sustainable Building Tax Credit must contain the following information as attachments: Deliverable On A Per Unit Basis:
- Warranty Deed (or a property tax bill that provides proof of physical address, legal description, and name of owner)
- EMNRD Supplemental Verifier Certification form
- Certificate of Occupancy issued by Building Code Authority
- LEED Reports
- LEED Certificate
- LEED Email
- LEED Scorecard
- LEED Online Registration
- LEED Certification Submittal for Batches of Single-Family Homes
- HERS Reports:
- HERS Certificate
- HERS Building Summary
- HERS Emissions
- HERS Fuel Summary
- HERS 2021 IECC Building UA Compliance
Eligibility Guidelines
| Building Type | Eligible Certifications |
|---|---|
| New residential buildings (single-family homes) | Build Green NM Gold or Emerald, or LEED-H Gold or Platinum |
| New commercial buildings (multifamily homes, nonresidential, or mixed use) | LEED Gold or Platinum |
| Manufactured housing (≥864 square feet) | ENERGY STAR |
| Large commercial renovations (≥20,000 square feet of temperature-controlled space, built ≥10 years prior to renovation) | Renovation reduces energy costs by ≥50% as compared to current ASHRAE standard |
- All buildings must be EV-ready and broadband-ready.
- Single-family residential homes must reduce water use by ≥25% as compared to standard fixtures.
- All ratings must be completed by an energy rating validator approved by ECAM.
- For new residential and commercial buildings, additional per-square-foot incentives are available for LEED-certified Zero-Carbon, Zero-Energy, Zero-Waste, or Zero-Water buildings.
Incentive Details
Required Documents
- Certificate of occupancy
- Proof of ownership (Deed, property tax bill, ground lease, or property transfer document)
- Building rating documents (including LEED, Build Green NM, or ENERGY STAR certification, as applicable, plus HERS certificate). *For detailed list see below.
New Commercial Buildings (Including Multifamily)
| Rating | Qualified Occupied Square Footage | Tax Credit per Square Foot |
|---|---|---|
| LEED-NC Platinum (New Construction) | First 10,000 | $5.25 |
| Next 10,001–49,999 | $2.25 | |
| Over 50,000 (up to 200,000) | $1.00 | |
| LEED-EB or CS Platinum (Existing Building or Core Shell) | First 10,000 | $3.40 |
| Next 10,001–49,999 | $1.30 | |
| Over 50,000 (up to 200,000) | $0.35 | |
| LEED-CI Platinum (Commercial Interiors) | First 10,000 | $1.50 |
| Next 10,001–49,999 | $0.40 | |
| Over 50,000 (up to 200,000) | $0.30 | |
| LEED-NC Gold | First 10,000 | $3.00 |
| Next 10,001–49,999 | $1.00 | |
| Over 50,000 (up to 200,000) | $0.25 | |
| LEED-EB or LEED-CS Gold | First 10,000 | $2.00 |
| Next 10,001–49,999 | $1.00 | |
| Over 50,000 (up to 200,000) | $0.25 | |
| LEED-CI Gold | First 10,000 | $0.90 |
| Next 10,001–49,999 | $0.40 | |
| Over 50,000 (up to 200,000) | $0.10 |
All buildings must be broadband ready and EV ready.
Additional for New Commercial Buildings
| Additional Criteria | Qualified Occupied Square Footage | Additional Tax Credit per Square Foot |
|---|---|---|
| Fully Electric Building | First 50,000 | $1.00 |
| Over 50,001 (up to 200,000) | $0.50 | |
| LEED Zero Carbon, Energy, Waste, or Water Certified | First 50,000 | $0.25 |
| Over 50,001 (up to 200,000) | $0.10 |
New Residential Buildings (Single-Family Detached Only)
| Rating | Qualified Occupied Square Footage | Tax Credit per Square Foot |
|---|---|---|
| LEED-H Platinum or Build Green Emerald (Homes) | Up to 2,000 | $5.50 |
| LEED-H Gold or Build Green Gold | Up to 2,000 | $3.80 |
| ENERGY STAR Manufactured Housing | Up to 2,000 | $2.00 |
All buildings must be broadband ready and EV ready. New residential buildings must achieve ≥25% water savings relative to standard fixtures.
Additional for New Residential Buildings
| Additional Criteria | Qualified Occupied Square Footage | Additional Tax Credit per Square Foot |
|---|---|---|
| Fully Electric Building | Up to 2,000 | $1.00 |
| LEED Zero Carbon, Energy, Waste, or Water Certified | Up to 2,000 | $0.25 |
Large Commercial Renovations
$2.25 per qualified occupied square foot, up to $150,000.
Requirements:
- Building constructed ≥10 years before the renovation
- ≥20,000 square feet of temperature-controlled space
- Broadband ready and EV ready
- Renovation reduces total energy costs by ≥50% as compared to the current ASHRAE standard
Source
Frequently Asked Questions
When is the tax credit available?
The tax credit is available through December 31, 2027.
Who is eligible for the tax credit?
Owners of qualifying New Mexico residential or commercial buildings that achieve an eligible “sustainable” certification. The owner at the time of building certification may claim the tax credit, or a subsequent owner may claim the tax credit if no credit has already been claimed.
Pass-through-entity (PTE) owners may not claim the tax credit directly, but the credit may be allocated to a PTE owner.
What is the maximum tax credit?
The maximum tax credit amounts are specific to each building type and certification.
A maximum of $25,000 may be applied against a taxpayer’s income tax liability per year for total tax credits <$100,000, and a maximum of 25% of the total credit may be applied per year for totals ≥$100,000.
What if the tax credit exceeds my tax liability?
The tax credit is not refundable, but any credit amount in excess of income tax liability may be carried forward for up to 7 years.
Is the tax credit transferable?
Yes, the tax credit may be transferred, sold, or exchanged as a business asset.
Is there a maximum funding cap for New Mexico?
A maximum annual aggregate of $4,250,000 in Sustainable Building Tax Credits is allowed ($2,000,000 for new residential construction, $1,000,000 each for new commercial construction and large commercial renovations, and $250,000 for manufactured housing.)
Is the tax credit first come, first served?
Yes, the order of acceptance is first come, first served.
What does it mean for buildings to be EV-ready?
New and existing sustainable commercial buildings must have ≥10% of parking spaces capable of charging electric vehicles. A parking space capable of charging electric vehicles must be equipped with at a least one minimum 40 ampere, 208 volt or 240 volt dedicated branch circuit for charging electric vehicles. The termination point can be a receptacle or junction box and shall be near where electric vehicles can easily be charged. The extension cord must be long enough to reach a vehicle and must meet electric code and electric vehicle manufacturing requirements
What does it mean for buildings to be broadband-ready?
Spaces, pathways and cabling have been provided to allow broadband service levels.
Where can I find a list of energy rating validators approved by ECAM?
Please contact emnrd.taxcredits@emnrd.nm.gov with questions on approved energy rating validators.
Are existing commercial buildings under 20,000 square feet eligible for the commercial renovation tax credit?
No, existing commercial buildings under 20,000 square feet are not eligible for the Sustainable Building Tax Credit for renovations. However, commercial buildings under 20,000 square feet may be eligible for the Sustainable Building Tax Credit for Energy Conserving Products.
Is a duplex considered a residential or commercial building?
For the purposes of the Sustainable Building Tax Credit, a duplex, triplex, or other multifamily apartment building falls under the commercial buildings category. Only free-standing, single-family homes without shared walls are considered residential buildings for the purposes of the Sustainable Building Tax Credit.
If a solar photovoltaic or solar thermal system is used as part of certifying a building for the Sustainable Building Tax Credit, is that solar system also eligible for the New Solar Market Development Tax Credit?
No, a solar system may only be used to qualify for one state tax credit. If a solar photovoltaic or solar thermal system is used as part of a building’s qualification for the Sustainable Building Tax Credit, that solar system is ineligible for the New Solar Market Development Tax Credit.
Why is it called the 2021 Sustainable Building Tax Credit
While this credit is named the “2021 Sustainable Building Tax Credit,” projects built in 2021 and years beyond can be eligible.