Tax Incentives for Historic Preservation

Association of Construction and Development
June 22, 2012 — 1,116 views  

The National Trust for Historic Preservation works to support the preservation of buildings and other architectural structures across the country. Established on October 26, 1949, it is currently a privately funded organization, despite a foray as a federally supported entity for 30 years.

 

Over 38,000 historic structures have been restored with funding assistance from the federal historic tax credit. Boston’s Faneuil Hall, San Francisco’s Ferry Building and New York’s Apollo Theater are just of a few of the more recognizable names. The organization raised over $62 billion in private investment funds to protect those aforementioned structures and others since 1976.

 

Interested parties can apply for the Federal Historic Preservation Tax Incentives Program to gain a Historic Rehabilitation Tax Credit to fund the maintenance and restoration of significant structures. The program is the result of a partnership between the National Park Service, Internal Revenue Service and the State Historic Preservation Office and is often referred to as the 20 percent tax credit.

 

According to the National Park Service, tens of thousands of rehabilitation projects have been funded by the program. The credit is available for the rehabilitation of income-producing buildings, which is determined by the Secretary of the Interior. It is expected that the building is listed in the National Register of Historic Places or included in a National Register historic district.

 

There are four basic requirements used to measure whether a project is eligible for the Historic Rehabilitation Tax Credit. As previously mentioned, a building must be eligible for the National Register of Historic Places or certified as contributing to the significance of a registered historic district and used for an income-producing purpose for at least five years prior to the application. For example, Boston’s Faneuil Hall houses multiple restaurants and retail shops and is a popular destination for tourists.

 

The cost of the rehabilitation project must be more than the pre-rehabilitation cost of the building. This requirement must typically be met within two or five years for a renovation scheduled to be finished within multiple phases. In addition, the quality of the work must follow the Secretary of Interior’s Standards for Rehabilitation, which include 10 principles firmly set so that a building’s character is preserved.

Association of Construction and Development