The Historic Preservation Tax Incentives Program works to revitalize communities across the country by offering a tax incentive for the rehabilitation of historic buildings. The program offers a 20% Federal tax credit to private investors who undertake substantial rehabilitation of a historic building that will be used for a business or other income-producing purpose while maintaining the historic character of the property. The 20% rehabilitation credit equals 20% of qualified expenses spent on the approved rehabilitation of a certified historic structure.
How do Historic Preservation Tax Credits work?
Only certified historic structures qualify for Historic Preservation Tax Credits. The National Park Service maintains a list of buildings that are certified as historic. The rehabilitation work must meet the Secretary of the Interior’s standards for rehabilitation, which aim to ensure the historic integrity of the building remains intact.
Taxpayers must complete a three-part application to qualify for the 20% tax credit:
- Part 1 presents information about the significance and appearance of the building
- Part 2 describes the condition of the building and planned rehabilitation work
- Part 3 certifies that the project meets specific standards laid out by the Secretary of the Interior
Do states offer Historic Preservation Tax Credits?
Many states also offer Historic Preservation Tax Credits. An application and approval process is required at the state level, as well. Missouri offers tax credits equal to 25% of qualified expenses of the rehabilitation to approved historic buildings. The Missouri Historic Tax Credits can be carried back 3 years or carried forward 10 years.
Find out how Anders can help with Missouri Historic Tax Credits.
Should I take advantage of Historic Preservation Tax Credits?
Yes, Historic Preservation Tax Credits are a great way for historic real estate owners to lessen their tax burden for rehabilitating or restoring their historic property. If you are considering purchasing or have already purchased a historic building for commercial use, contact an Anders advisor below to take the next steps for qualifying for these tax credits.All Insights