Rehabilitation Tax Credits FAQs

Yes! The National Park Service (NPS) maintains several websites with information about various aspects of the tax credit program. The best place to start is http://www.nps.gov/tps/tax-incentives.htm

The tax credit program only applies to income-producing properties, such as commercial, industrial, agricultural or rental residential properties. If a portion of a private residence is used to conduct business, you may be able to take the credit for that portion of the building that is dedicated to this use.

AHPP does not provide tax or financial advice to property owners. Our role in the tax credit program is to review the proposed work to assure that historically significant architectural features, spaces, and finishes are retained during the renovation. The National Park Service does provide several websites with tax-related information. You can access these sites at 

http://www.irs.gov/pub/irs-pdf/f3468.pdf

http://www.nps.gov/tps/tax-incentives/taxdocs/about-tax-incentives-2012.pdf

We urge you to consult with your tax professional before starting your project to determine how the tax credit can best work for you.

Owners of buildings that are not yet listed individually in the National Register of Historic Places or located in districts that are not yet registered historic districts may use the Historic Preservation Certification Application, Part 1, to request a preliminary determination of significance from the National Park Service. Such a determination may also be obtained for a building located in a registered historic district but that is outside the period or area of significance of the district. A preliminary determination of significance allows the owner to proceed with the rehabilitation project while the process of nominating a building or a district continues. Preliminary determinations, however, are not binding. They become final only when the building or the historic district is listed in the National Register or when the district documentation is amended to include additional periods of areas of significance.

 

A tax credit differs from an income tax deduction. An income tax deduction lowers the amount of income subject to taxation. A tax credit, however, lowers the amount of tax owed. In general, a dollar of tax credit reduces the amount of income tax owed by one dollar.

The 20% rehabilitation tax credit equals 20% of the amount spent in a certified rehabilitation of a certified historic structure.

The 10% rehabilitation tax credit equals 10% of the amount spent to rehabilitate a non-historic building built before 1936.

Answers to some of the questions above courtesy of the U.S. Dept. of the Interior, National Park Service, Technical Preservation Services.