Historic Tax Credit

The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation's most successful and cost-effective community revitalization programs. It has leveraged over $69 billion in private investment to preserve 39,600 historic properties since 1976.

 

The National Park Service and the Internal Revenue Service administer the program in partnership with State Historic Preservation Offices. A 20% income tax credit is available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures.” The State Historic Preservation Offices and the National Park Service review the rehabilitation work to ensure that it complies with the Secretary’s Standards for Rehabilitation. 

 

The 10% tax credit is available for the rehabilitation of non-historic buildings placed in service before 1936. The building must be rehabilitated for non-residential use. In order to qualify for the tax credit, the rehabilitation must meet three criteria: at least 50% of the existing external walls must remain in place as external walls, at least 75% of the existing external walls must remain in place as either external or internal walls, and at least 75% of the internal structural framework must remain in place. In 2013, the State of Texas established a 25 percent State Historic Tax Credit. Both the Federal and State HTC may be used by individuals and corporations to be applied towards their State and Federal tax liability. Alternative, the HTCs may be sole, or syndicated to investors.