What is a historic preservation tax credit?

Historic Preservation Tax Credit is a government incentive program that provides tax credits to property owners who rehabilitate certified historic buildings according to specific preservation standards, encouraging the restoration and reuse of historically significant structures.

How Historic Preservation Tax Credit Programs Work

• Property owners apply to have their building certified as a historic structure eligible for the tax credit program.
• Rehabilitation work must meet specific preservation standards to maintain the building's historic character.
• Upon completion and certification of the qualifying rehabilitation work, owners receive a tax credit based on a percentage of eligible rehabilitation expenses.
• Credits can often be sold or syndicated to investors, providing an additional source of project financing.

What Is a Historic Preservation Tax Credit Used For

• Encourages the restoration and adaptive reuse of historically significant buildings rather than demolition.
• Provides a valuable source of project financing, offsetting the often higher costs of historic rehabilitation work.
• Supports the preservation of neighborhood character and architectural heritage.
• Can be combined with other incentive programs to further improve project economics.

Best Practices for Utilizing Historic Preservation Tax Credits

• Engage preservation consultants experienced with the specific certification and compliance requirements early in the planning process.
• Carefully document all rehabilitation work to ensure compliance with required preservation standards.
• Explore opportunities to combine historic tax credits with other available development incentives.
• Plan project timelines to account for the certification and approval process required by the tax credit program.

Historic preservation tax credits provide a powerful financial incentive for restoring historically significant buildings, supporting both preservation goals and improved development project economics.