Historical rehabilitation tax credits can benefit you by:
- Encouraging private sector investment in the rehabilitation and re-use of historic buildings.
- Providing a 20% income tax credit for income-producing properties that are determined to be “certified historic structures.”
- Providing an alternative 10% tax credit for the rehabilitation of non-historic non-residential buildings placed in service before 1936.
Eligibility requirements per 36 CFR § 67 and 26 U.S. Code § 47:
- Properties should be at least 50 years old and eligible for listing on the National Registry of Historic Places and/or located within a National Register District or is of historic significance to such District.
- Properties must be in need of substantial rehabilitation with the total rehabilitation expenditures during the 24-month period selected being greater than the owner's adjusted tax basis in the building. If completed in phases then the period is extended to a 60-month period.
- Alterations must maintain, preserve, and protect the character-defining features of the historic property by not damaging the historic integrity of the building, (roughly 75% or more fo the existing external walls and internal structural framework).
- The end goal must be an income producing property that is consistent with the historic character of the district in which such property is located. Adaptive re-use rehabilitations are often the main motivation for purchasing a historic building.