Federal Historic Rehabilitation Tax Credits The federal historic rehabilitation tax credit (HTC) program provides financial assistance to projects involving the rehabilitation of historic buildings. Under this program, 20% of the total qualified rehabilitation expenditures are provided to the owner in the form of a dollar-per-dollar credit toward federal income taxes. The 20% income tax credit is available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures” and are rehabilitated to the Secretary of the Interiors Standards (the Standards). The credits if not used by the owner can be sold/syndicated to an investor in exchange for cash. The three-part application process is first reviewed by the state historic preservation office with the National Park Service having final authority over approval of the project.
Massachusetts Historic Rehabilitation Tax Credits Similar to the federal program, Massachusetts Historic Rehabilitation Tax Credits are available for historic income producing properties to assist in financing rehabilitation/renovation projects that meet the Standards. Unlike the federal program, projects can be awarded up to 20% of the total qualified rehabilitation expenditures. Additionally, buildings need only be eligible for listing on the National Register rather than listed as required by the federal program.
National Register Nominations Listing on the National Register places a property on the federal government's list of historic properties. National Register listing qualifies a building and rehab project to potentially receive historic tax credits. While credits can be granted to buildings determined eligible for listing, listing must ultimately occur to receive federal credits.
Maine Historic Rehabilitation Tax Credit The Maine Historic Rehabilitation Tax Credit program includes two tax credit options, a Substantial Credit and a Small Project Credit. The Substantial Rehabilitation Credit is a 25% state credit of qualified expenditures for a rehabilitation project that qualifies for the Federal Historic Rehabilitation Tax Credit Program. The Small Project Rehabilitation Credit is for rehabilitation projects that incur qualified rehabilitation expenditures of between $50,000 and $250,000 and does not have to meet the adjusted basis required for the federal program, thereby allowing smaller projects to qualify for state credits.
Connecticut Historic Rehabilitation Tax Credits The CT Historic Rehabilitation Tax Credit Program has a 25% tax credit on the Qualified Rehabilitation Expenditures (QREs) associated with the rehabilitation of a Certified Historic Structure listed on the Connecticut State Register. In Connecticut, QREs are only hard costs associated with the rehabilitation. The building have a post-rehabilitation use of one of the following:
- residential use of five units or more; - mixed residential and nonresidential use; or - nonresidential.
The CT credit increases to 30% if the project is located within a federally designated opportunity zone or the project includes an affordable housing component, provided at least 20% of the rental units or 10% of for-sale units qualify under C.G.S., Section 8-39a. The program makes $31.7 million in tax credit reservations available each fiscal year. The per-project cap is up to $4.5 million in tax credits.
Section 106 Review Projects involving federal actions, permits, approvals, licenses, funding or financing require review of the State Historic Preservation Office through a filing that identifies, evaluates and assesses effects to historic properties.
State Level Review States typically have similar regulatory reviews for state actions with projects reviewed by the State Historic Preservation Office like projects under Section 106. A filing is required and a similar process as Section 106 is required to complete the review.
Local/Municipal Historic Preservation Compliance Cities and towns often have their own reviews of projects affecting historic properties including demolition delays, local historic districts and reviews of changes to landmark properties.
Design Review Additions and alterations to historic buildings with the assistance of preservation consultant can blend with the historic building and preserve important character defining features.