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Historic Preservation Tax Credits

 

Nationally, the Federal Historic Preservation Tax Credit is the most popular historic preservation incentive program. Many states also have a state income tax credit program for the rehabilitation of historic properties that is based on the federal program.  Currently, Iowa has an excellent state program, while Illinois does not have a statewide program. Both the federal and Iowa programs follow a similar three-part application process, and rehabilitation work must meet the Standards for Rehabilitation for the project to qualify for the program.

 

At this time, only income-producing (commercial, industrial, rental) properties qualify for the Federal Historic Preservation Tax Credit.  Applicants who conduct a substantial rehabilitation of a property listed on the National Register of Historic Places that is certified by the State Historic Preservation Office as meeting the Standards for Rehabilitation are eligible to receive a income tax credit of 20% of the qualified rehabilitation costs.  A standard application must be filled out for the tax credit, including a description of work to be undertaken and photographs showing existing conditions, which must be approved by the State Historic Preservation Office.  For commercial buildings built prior to 1936 that are certified as not eligible for the National Register, a 10% tax credit may be taken for a qualified rehabilitation.  More information on the federal historic tax credit program can be found at www.nps.gov/tps/tax-incentives.htm.

 

Iowa's rehabilitation tax credit program provides 25% of qualified rehabilitation costs as a refundable state income tax credit for historic properties listed on or eligible for the National Register of Historic Places or any barn built prior to 1937.  Commercial, residential, rental, church, school, and barn projects qualify for this tax credit. Starting on July 1, 2013, commercial properties must spend at least $50,000 (or 50% of the assessed value of the building, if less), while non-commercial properties must spend at least $25,000 (or 25% of the assessed value of the building, if less) to meet minimum expenditures requirements to qualify to apply for the program. Each year, 10% of the annual funding allocation is reserved for "small projects" defined as $750,000 or less in qualified rehabilitation costs, and applications are typically accepted year round in this category. Large projects typically must submit Part 2 applications in the first 10 days of July to be considered for the program. Additional information on the Iowa historic tax credit can be found at: www.iowahistory.org/historic-preservation/tax-incentives-for-rehabilitation/state-tax-credits/index.html

 

SPARK Consulting provides expertise in successfully completing applications for the Historic Preservation Tax Credit programs, including Part 1 (building and project eligibility), Part 2 (description of rehabilitation work), and Part 3 (certification of completed work). Rebecca Lawin McCarley is thoroughly knowledgeable about the Secretary of the Interior's Standards for Rehabilitation and has experience completing all three parts of the historic tax credit applications for the rehabilitation of historic buildings listed on and/or eligible for the National Register of Historic Places.

 

For additional information, contact SPARK Consulting.

 

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Last modified:  June 2013