Rehabilitation Tax Credit Applications

Tax incentives are an effective way to offset the cost of a historically appropriate rehabilitation. Tax incentives include a one-time federal income tax credit that is equal to 20% of the approved rehabilitation expenditure used to rehabilitate an income-earning property.

State and local tax incentive programs vary.

The Federal 20% Tax Credit

•The building must be listed individually in the National Register of Historic Places or is a certified contributing structure within a National Register Historic District.

•After rehabilitation, you must own the building and use it to produce income for five years.

•The costs of the rehabilitation work must be "substantial." This means that the rehabilitation costs during a 24-month period must be more than $5,000 and greater than the adjusted basis of the building. The adjusted basis of the building is usually the purchase price, minus the cost of the land, plus the value of improvements already made, minus depreciation already taken.

Learn more about the Federal Historic Preservation Tax Incentives program.