Federal
The Federal Rehabilitation Tax Credit, otherwise known as the Historic Tax Credit, is one of the most powerful historic preservation tools on the federal level. Recognizing the cost associated with rehabilitating historic buildings, the Historic Tax Credit provides a 20% income tax credit to developers of income producing properties such as office buildings, retail establishments, rental apartments, and others.
Established in 1976, studies show the historic tax credit actually stimulates more revenue than it costs – meaning it is a win-win nationwide. Since its inception, the federal historic tax credit has generated over $199 billion in estimated rehabilitation investment, produced over 185,000 low and moderate income affordable housing units, created nearly 3 million jobs, and resulted in the preservation of more than 48,000 buildings (2021).
SHPOs review Historic Tax Credit projects to assure their consistency with the Secretary of the Interior’s Standards and the National Park Service provides the final “certification” necessary for each project. Learn more about the Historic Tax Credit, on the National Park Service website or view information provided by your State Historic Preservation Office.
State
Several states offer incentives to preserve historic resources. While programs are ever-changing on a state by state basis, the National Trust for Historic Preservation maintains a list noting each states tax incentive program. Provisions are variable by state, with different percentages, caps, and eligibility requirements. Some states offer commercial tax credits which can be paired with the federal historic tax credit, and some offer residential (homeowner) tax credit programs.
Some states offer specialty historic tax credit programs which provide for tax incentives for things like barns, ballparks, museums, theaters – while others may utilize property tax freezes as an additional or alternate incentive.
