- First Time Builders
- Church Leaders
- Contractors Central
- Small Business
- Steel Insider
What are the Tax Benefits of Steel Buildings?
As we move into the future, our society has the ability to make informed decisions. We’ve become aware that alternatives exist for just about everything. From green energy to vegan diets, you can move away from the status quo and traditional choices if you want. The same can be done when it’s time to build a new steel garage, workshop or shelter.
There are several options when it comes time to pay for a steel building. Whether you finance it through your bank, or pay for it with cash, a loan or credit, you have options. As you know, pre-engineered steel buildings are extremely affordable – but there are so many ways you can save money over the lifetime of the building, especially if you’re going to be using this steel building in a residential setting.
Let’s get one thing straight right now. A pre-engineered steel building is an investment. I figure you already understand this concept. You’re investing your money and future into a steel building and you expect a good return on your investment. Whether it’s the almost non-existent maintenance, the high resistance that will protect your building from fire, wind, heavy rain, and termites, or just the durability that allows the best companies to offer 50-year structural warranties, your pre-engineered steel building will typically allow you to invest your funds in other ventures in your life. You won’t have to worry about your steel building rotting and collapsing like wood structures are known for over time, and you more than likely won’t have to replace any steel columns or rafters after you erect your pre-engineered steel building. That’s all long term savings. Want more short term savings? Apart from being a tax break itself, your steel building could offer you more tax benefits and raise your property value.
By incorporating alternative energy technologies like solar energy, geothermal heat pumps, and small wind energy into your pre-engineered steel building, you could save money on your energy bill and a pre-engineered steel building is a perfect fit for green technologies. Steel itself is considered ‘green’ because it’s inorganic and recyclable. There are also numerous tax credits like the Residential Energy Property Credit that you can research. It’s possible to take advantage of the Nonbusiness Energy Property Credit by installing select water heaters, exterior windows, doors, or skylights, and the proper insulation to reduce heat loss or gain. Check to see if those accessories are Energy Star rated because some federal tax credits might be available with regard to specific product categories.
If you add a permanent structure to your property, such as a steel garage building, it can raise your property value. This is called a capital improvement and could save you on your taxes if you decide to sell your property in the future. A capital improvement must last at least a year and be evident when you decide to sell. Should you build a pre-engineered steel building, you’re covered; quality steel buildings are designed to last decades.
You may not have to spend any money up front to add green energy alternatives to your pre-engineered steel building because there are financing options such as the PACE programs. PACE stands for Property Assessed Clean Energy and allows residential and commercial property owners to pay back their project overtime as a voluntary property tax assessment through their existing property tax bill. You have the option to amortize or reduce your payments for up to 20 years and this can keep your payments low enough that your energy savings may actually be more than your payment. When you finance through a PACE program, the interest on your loan may be tax deductible. You won’t be tied down by your PACE loan either because the loan is attached to the property and will transfer if you decide to sell your property before you repay the loan. Generally, you can add insulation, heating, ventilation, air conditioning replacements, solar photovoltaic and thermal systems, and low flow toilets. You can search here to see if your local municipality has a PACE program.
Should you opt to install alternative energy equipment in your new pre-engineered steel building, you could qualify for the Residential Energy Efficient Property Credit. The credit is generally 30% of qualified property such as solar hot water heaters, solar electricity equipment, wind turbines, and fuel cell property installed on or in connection to your home.
When designing your residential steel building, you may need a home office. This designated work space could save you on your taxes as you might be able to deduct expenses for the business use of your home. Should you want to add an office to your pre-engineered steel building, all you have to do is talk to your project manager in design phase of your pre-engineered steel building, and make sure you’re meeting local building codes and energy efficient standards
You can’t take advantage of any of these tax breaks if you decide to rent. Whether you are a small business owner, a church pastor or first time builder, paying rent is holding you back from saving a ton of money. According to The Wall Street Journal, rent has been rising by 15.2% for the past 5 years. If you purchase a pre-engineered steel building, you won’t become a victim of this rising cost of rent and you can take advantage of all of the tax breaks allocated to a building owner.
Remember, tax allocation money is always changing based off the way our Congress votes year to year. In some instances, it might be legally required to build with green materials. For more information on energy, efficiency and federal tax credits, click here. Take advantage of these tax breaks and get the most out of your investment.
Got any more savings to share? List them here to help out your fellow consumers.
Photo courtesy: Alan Cleaver
« Debunking the Myth That Steel Buildings Cost More
10 Things Many Folks Don’t Know About Steel Buildings »