Consider this simple T4 template:
<# for (var i = 0; i < 10; ++i) { WriteLine("hello"); } #>
Trying to build the project results in a compilation error because ‘var’ is an unknown type. A bit of research learned me that i should instruct the processor to use a specific c# version like this:
<#@ template language="C#v3.5" inherits="Microsoft.VisualStudio.TextTemplating.VSHost.ModelingTextTransformation" #>
<# for (var i = 0; i < 10; ++i) { WriteLine("hello"); } #>
Problem solved 