Lead Safety Tax Credit Offers Up to $3,000 for Pre-1978 Home Upgrades, But Expires in 2028

The new Home Lead Safety Tax Credit Act of 2025 is setting up a temporary financial incentive to tackle a decades-old problem: lead poisoning in older homes. If you own or rent out a place built before 1978—which is when lead paint was banned for residential use—this bill creates a federal income tax credit to help cover the cleanup costs.

The Deal: 50% Off Your Lead Cleanup

Starting in 2025, this credit covers 50% of your qualified costs for lead hazard reduction activities. The maximum credit you can claim depends on how deep you go with the remediation:

• Permanent Abatement: You can claim up to $3,000 per unit per year for serious work, like replacing windows, permanent encapsulation, or removing lead-contaminated soil. This is the heavy-duty stuff.
• Interim Control: You can claim up to $1,000 per unit per year for less intensive measures, such as specialized cleaning, repairs, and monitoring designed to reduce exposure for more than ten years. Think of this as the maintenance and repair track.

There’s also a hard cap: the total credit claimed for any single dwelling unit over its lifetime cannot exceed $4,000. This means if you get the full $3,000 credit one year, you only have $1,000 left for future work on that property.

Who Qualifies and What Counts?

This credit is aimed squarely at owners of pre-1978 residential units. The eligible costs are comprehensive, covering everything from the initial lead hazard assessment by a certified risk assessor to the final clearance testing. It even covers temporary relocation costs for occupants while the work is being done. This is a huge win for landlords or homeowners who need to move their family out for a few days during construction.

But here’s the fine print: the work must be done or supervised by certified professionals or “qualified contractors” who have completed EPA- or HUD-approved training. You can’t just hire your cousin with a paintbrush. This is critical because lead abatement is highly technical and dangerous if done incorrectly. The bill requires written documentation from a certified inspector confirming the work meets the required safety criteria before you can claim the credit.

The Catch: Basis Reduction and Expiration Date

While this credit is a solid push toward safer housing, there are a couple of things property owners need to keep in mind. First, this credit is temporary. It applies to costs paid starting in 2025 but expires completely after December 31, 2028. If you’re planning a major overhaul, you have a tight window to get the work done and claim the benefit.

Second, and this is the classic tax-code trade-off, you must reduce the tax basis of your property by the amount of the credit you receive. For example, if you claim a $3,000 credit, your property’s cost basis for tax purposes goes down by $3,000. This matters down the road: when you eventually sell the house, a lower basis means you’ll likely pay capital gains tax on a slightly larger profit. It’s a mechanism that helps fund the credit now but reduces your tax benefit later.

Finally, if you live in an area that already offers a state or local tax credit for lead removal, the federal credit will be reduced by the amount of that local credit. You can’t double-dip on the full amount, which is standard practice when coordinating federal and local incentives.