CARES Act: Tax Incentives for Capital Projects 04/07/20

While 2020 already seems endless, it is only April and chances are many property owners have budgeted for capital improvements for this year that have yet to begin. Given the current circumstances, organizations may consider deferring these expenses however it is important to note that the recently signed CARES Act includes a provision for 100% depreciation for all qualifying improvements. This is a massive opportunity for property owners to make virtually free updates to their properties and should not go overlooked, especially in the Boston area given the historic nature of many of our buildings. As expected, capital improvement projects may not be high on the priority list right now as most efforts are being put into the short term work of figuring out this new normal. That strategy is certainly understandable and necessary in the very near term but deferring capital improvement projects can be very costly in the long run. These improvements will also increase the property’s value in a turbulent market.

Capital Improvements that qualify are upgrades to your property such as building facade, windows, and roofing repair and replacement. On the interior of a building, the addition of amenities such as a fitness center, entertainment room, or a pool along with upgrades to finishes including flooring, lighting, kitchens, and bathrooms could also qualify. Let’s also now forget possible upgrades to mechanical systems such as high-efficiency heat pumps, boilers, or cooling towers. Check-in with your CPA to see exactly what qualifies for your property. The money spent can be applied to qualifying tax bonus credit up to five years essentially making these expenditures free to perform this year. This is the government's incentive to boost the economy and add value to assets after the pandemic has passed. 

Contacting a construction manager to handle these projects can take the burden off your plate. While social distancing guidelines are in place virtual meetings and tours along with other innovative solutions can be found to begin the process of designing and or bidding out these projects. If you do have an urgent project that needs attention in the short term, a skilled construction manager like Hemenway CM has already put safety protocols in place as a response to the COVID-19 outbreak. Measures like active monitoring of staff health, online meetings and enhanced hygiene requirements on job sites will help ensure safety is a top priority within your building while an emergency project is completed.

This is certainly an unprecedented time for property owners and we are sure many are struggling with the realities of this crisis. However please take a minute to consider the long term prospects for your property. Given these new guidelines within the CARES Act, this an opportunity for owners to move forward with important property improvements that will have lasting benefits beyond these few months of crisis. For more information on completing your CI project in the near or longer-term, contact Chris Hemenway at or 617-322-6348.

Contributor Bio

Hemenway Construction Management has been developed as a new and up and coming general contracting and full-service construction management company for the 21st century. We strive to provide “back to basics” service with a modern sustainable platform. The combination of innovative research, cooperation with local, state, and federal organizations and programs, and willingness to stay on the cutting edge with the latest in software and integration, separates Hemenway from other companies in the industry.

We provide general contracting services, construction services, preventative maintenance services, and mechanical service to the New England area, mostly limited to Massachusetts but also NH and RI. Hemenhalt covers a wide range of the industry from new construction to remodels and rehabilitation projects, to sustainable upgrades in both the residential and commercial sectors. Whether developing a new community or adding solar panels to your rooftop, Hemenway will carry you from planning and design through to a successful finished product.

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