Historic and Preservation Tax Credits
The Rehabilitation Tax Credit, also called the Historic Tax Credit or Preservation Tax Credit, is a tax credit for renovating and restoring historic buildings in your community. This credit is available at the Federal level and often at the state level, including in Georgia.
Federal Historic Tax Credit
Restoration and rehabilitation activities on historic structures can receive a 20% tax credit on the eligible expenses. To qualify for the credit, the rehabilitated structure has to be listed in the National Register of Historic Places, listed as contributing to the National Register, or located in a state or locally certified historic district to qualify. Project approval is determined through State Historic Preservation Offices with the National Park Service.
Application Process
The application is a three-step process. All sections are first submitted to the State Historic Preservation Office, which reviews them for accuracy and completeness and recommends them to the National Park Service.
Part 1 of the application focuses on the building and its significance. This is when it is determined whether the building qualifies as a historic structure.
Part 2 focuses on the rehabilitation activities utilizing the Secretary of the Interior’s Standards for Rehabilitation. This section will determine whether the plans are eligible.
Part 3 is submitted after the work is complete and certifies that the project was completed as described.
Benefits of the HTC
The tax credit is based on the qualified rehabilitation expenses, which can include:
- structural components of the building
- plumbing, heating/cooling, and electrical components
- legal fees
- development fees
- engineering fees
Ultimately, 20% of the eligible expenses result in a tax credit. The tax credit is claimed ratably over five years, starting when the building is placed in service.
While this credit is excellent for large developments, over 50% of all certified projects have qualified rehabilitation expenses of less than $1.3M.
Georgia Rehabilitated Historic Property Program
Georgia offers a 25% income tax credit for qualifying rehabilitation expenses. This is capped at $5M per project or $10M if employment and wage requirements are met.
Additionally, the State offers Preferential Property Tax Assessment for eligible properties. This program freezes the county property tax assessment for up to nine years.
Don’t let this valuable tax credit opportunity go up in smoke. Contact us today to get started on your application.
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