Sag Harbor Village, New York has become the most recent of more than 400 local governments across the country to incentivize green building.
Last year, the New York state legislature unanimously passed the Energy Conservation Bill enabling local governments to provide property tax exemptions for commercial and residential construction or improvements that meet LEED standards.
On September 10, 2013, the Village Board of Trustees of Sag Harbor adopted Local Law #4 of 2013, providing, “construction of improvements to real property meeting LEED certification standards for green buildings shall be exempt from taxation to the extent provided by this local law.”
The real property tax exemption is for any increase in assessed value resulting from the construction or reconstruction of a property for up to 10 years, as prescribed in the law. LEED Silver, Gold and Platinum certified building is exempt from 100% of increased tax for the first 3 years. For Platinum projects that 100% exemption continues through year 6 and then phases out through year 10. There is slightly less advantageous phasing out of the exemption for Gold and Silver projects.
The new law goes well beyond LEED when the exemption also applies where the construction “meets the Green Building Initiative Green Globes Rating System, the American National Standards Institute or any other substantially equivalent standards for certification using a similar program for green buildings as determined by the Assessor.”
And remembering this is Sag Harbor, the maximum exemption amount under the law is $1 Million.
The voluntary incentives offered by government, like this tax break in Sag Harbor is a non-prescriptive non-regulatory approach to environmental solutions and energy policy that responds to the overwhelming public sentiment that government has not done enough to protect the planet, while not burdening land owners with another mandate. Green building is results oriented environmental stewardship that may portend a future for broader environmental policy.