Tax Credit Overview
- Historic preservation tax credits provide businesses and developers with a funding mechanism to undertake projects in older buildings, providing valuable gap financing. A fully refundable 20% federal tax credit and matching 20% state tax credit can be claimed for investments in commercial properties deemed architecturally and/or historically significant. The property must be listed (or eligible for listing) on the National Register of Historic Places. All interior and exterior work is eligible for the tax credits as long as the work represents a qualified rehabilitation expense.
- A refundable 20% tax credit for investments made in commercial properties
- Building must be listed on (or eligible for) the National Register of Historic Places
- Applies to both interior and exterior rehabilitation work
- Not limited solely to the historic features of the building (e.g. HVAC improvements are eligible)
- Work must comply with the U.S. Secretary of the Interior's Standards for Rehabilitation
- Final value of the tax credit is determined by the total qualified rehabilitation expenditures
- Tax credit can be monetized through purchase by investors
- Credit is claimed through federal income tax filing
- Work must be approved by the National Park Service
- Applications for the program are submitted to the National Park Service
- No per-project cap on tax credits
- Matches the federal tax credit with an additional 20% refundable credit
- Mirrors the federal tax credit program with some exceptions
- Project must be located in a qualified census tract
- Credit is taxable at the federal level based on tax bracket
- Tax credit is claimed through state income tax filing
- Work must be approved by the State Historic Preservation Office
- No application is required for the program
- Tax credits are capped at $5 million per project
FEDERAL TAX CREDIT
STATE TAX CREDIT
Examples of potentially eligible expenses: Architectural fees, historic preservation tax credit application and application preparation fees, permits, engineering fees, certain taxes (during certified rehab), some insurance, construction interest, project management, roof, gutters, debris removal, security, exterior painting and tuck pointing, electrical upgrades, plumbing upgrades, HVAC services (including geo-thermal external components), lead-hazardous materials abatement, window and door repairs/replacement, interior surface finishes, built-in structural element repairs, ADA accessibility interior elements, interior elevators (conditionally), fire suppression, interior signage, exterior attached lighting, etc.
- More information on the federal tax credit is available through the National Park Service.
- More information on the state tax credit is available through State Historic Preservation Office.
To learn more about these Historic Preservation Tax Credits, please contact us today. Please contact us today!