Federal Historic Tax Credit Certification

Owners of historic properties may be eligible for an income tax credit when they rehabilitate their historic property per U. S. Department of Interior standards. On federally-approved rehabilitations, owners can receive a one-time credit against federal income taxes owed equal to 20% of the cost of the project's qualified rehabilitation expenditures.

To qualify:

The property must have an income-producing end use, i.e., commercial, retail, office, rental residential, or industrial; or be used in the owner's business;

the property must be listed individually on the National Register of Historic Places, OR

qualify as a contributing structure in a designated National Register historic district;

the property owner must exceed the adjusted basis of the property on the cost of rehabilitation;

the proposed rehabilitation must meet historic design guidelines for the program as outlined in the Secretary of the Interior Standards for Rehabilitation.

Affordable Housing and Historic Tax Credit Certification

Portfolios of affordable housing projects in need of rehabilitation are prime candidates for historic rehabilitation tax credit equity infusion. In the current Low-Income Housing Tax Credit (LIHTC) equity environment, the historic tax credit equity can be the critical piece of financing that makes an affordable housing project feasible for owners rehabilitating existing affordable housing, and for new owners pursuing acquisition and rehabilitation.

New Market Tax Credits and Historic Tax Credit Certification

The federal New Markets Tax Credit Program (NMTC) is another tool used to augment the historic tax credit. Established by Congress in 2000, the NMTC program targets low-income communities and can be utilized by commercial and mixed-use real estate developments as long as less than 80% of gross rental income on a building-by-building basis comes from residential dwelling units.

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