Solar & Battery Regulation & Incentive Programs

City of Houston - Property Tax Abatement for Green Commercial Buildings

Program Overview

Category:: Financial Incentive
Program Type:: Property Tax Incentive
Implementing Sector:: Local
State:: Texas
Eligible Storage Technologies:: Solar - Passive, Solar Water Heat, Solar Space Heat, Solar Photovoltaics, Wind (All), Biomass, Geothermal Heat Pumps, Daylighting, Comprehensive Measures/Whole Building, Hydroelectric (Small)
Website:: http://www.houstontx.gov/igd/?fbclid=IwAR1Fweccdr_Csv5QmFcrU5RUIB1O6xQxk7iXqBHd1ilhgKcCmO7QHeC4SsU
Incentive Amount:: LEED Basic Level: 1.0%
LEED Silver Level: 2.5%
LEED Gold Level: 5.0%
LEED Platinum Level: 10%
Equipment Requirements:: Must be LEED certified
Must be new construction
Administrator:: Economic Development Division of the City Finance Department
Applicable Sectors:: Commercial
Expiration Date:: 03/30/2018
Last Updated:: 07/08/2020

Summary

In September 2009, the City of Houston Tax Abatement Program was enacted (Ordinance No. 2009-858), establishing a partial tax abatement for U.S. Green Building Council Leadership in Energy and Environmental Design (LEED)-certified commercial buildings. Since its inception, the tax abatement has been renewed three times, most recently in 2016 (Ordinance No. 2016-252).

Abatement Amount

The Ordinance specifies the abatement as follows:

“If the owner of a new or refurbished commercial facility has registered with the U.S. Green Building Council seeking LEED Certification, then the Economic Development Division…may recommend approval by the City Council of a partial tax abatement for the incremental investment associated with obtaining such certification. The agreement shall be effective up to 10 years, at a percentage based upon the level of certification actually obtained after completion of construction or refurbishment":

Basic “Certified” Level: 1.0%
Silver Level: 2.5%
Gold Level: 5.0%
Platinum Level: 10%”

Minimum Investment Requirement

The LEED building tax abatement can be a stand-alone abatement or part of a standard economic development tax abatement. If used as a stand-alone tax abatement, the minimum investment requirement to be eligible for the partial tax abatement is:

$1 million for an investment in a commercial structure that achieves Platinum LEED Certification,
$2 million for an investment in a commercial structure that achieves Gold LEED Certification,
$4 million for an investment in a commercial structure that achieves Silver LEED Certification, and
$10 million for an investment in a commercial structure that achieves basic LEED Certification.

A new restructuring of the Property Tax Abatement is being considered for the City of Houston which would include an implementation period beginning in the 2nd quarter of 2020 and ending in the 4th quarter of 2021.

A comprehensive document outlying this new structure can be found here.

Authorities

Name	Enacted Date	Effective Date	Expired Date
Article IV § 44-131	09/16/2009		03/30/2018
Ordinance No. 16-252	03/30/2016	03/30/2016	03/30/2018