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Sustainable Building Tax Credit (SBTC)

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Sustainable Building Tax Credit (SBTC)

The Sustainable Building Tax Credit (SBTC) reflects the state’s intention to incentivize cutting-edge sustainable building practices, as well as the use of energy-efficient products.

There are three ways to benefit from the New Mexico Sustainable Building Tax Credit Program:

  1. By installing energy-conserving products in an existing residential or commercial building.
  2. Constructing a new residential or commercial building in a manner that qualifies for Build Green New Mexico or LEED (Leadership in Energy and Environmental Design) certification.
  3. Renovating a commercial building in a way that reduces total energy and power costs by fifty percent.

These credits are available to New Mexico taxpayers filing either a personal income or corporate tax return.

The credits for installing energy-conserving products went into effect on January 1, 2021, and applications for those credits can be submitted now via an online portal.

Before accessing the online application, please read the application instructions and checklist to verify you have all of the required documentation ready for upload with your application. Energy-Conserving Products include certain air source and ground source heat-pumps, heat pump water heaters, windows, doors, insulation upgrades, and electric vehicle charging equipment. Applications that include insulation upgrades and/or electric vehicle charging equipment will require uploading an Energy Conservation Products Work Detail Form completed and signed by the installation contractor.

The new construction and commercial renovation credits went into effect on January 1, 2022. ECMD expects to begin accepting applications for those credits, also via an online portal, in early 2023. Please return to this page for a status update on that portal at the end of January 2023.

Please note that the Legislature placed annual program caps on the total amount of tax credits that ECMD can approve under this program. So, it is important to submit your application as soon as possible. There also are caps on the amount of tax credit that can be awarded for each energy-conserving product installed. The caps are higher for products installed in affordable housing units or dwelling occupied by low-income residents. See details on those caps here.

However, there are no caps on credits individual taxpayers can claim for their construction projects.
The table below outlines the annual fund caps for the program.

Sustainable Building Tax Credit Categories and Funding Amounts

Project Type Tax Credit Program Caps Per Calendar Year Effective Date SBTC Qualification Requirement
Energy Conserving Products $2,900,000 1/1/2021 Products must meet Energy Star Certification or other specifications detailed in the application instructions and checklist.
New Residential Construction $2,000,000 1/1/2022 Project must meet Build Green NM Gold or Emerald or LEED-H Gold or Platinum Certification
New Commercial Construction $1,000,000 1/1/2022 Project must meet LEED Certification
Manufactured Housing $   250,000 1/1/2022 Project must comply with Energy Star Program
Large Commercial Renovation $1,000,000 1/1/2021 Project must be 50% better than ASHRAE Standard
Total SBTC Allocation $7,150,000