Home Return to Table of Contents: Sources of Financial Assistance for Historic Preservation Projects Federal Tax Incentives

Historic Preservation Tax Credits
Tax Deductions for Preservation Easements

Historic Preservation Tax Credits
Recipients: Owners of commercial, industrial, agricultural, or rental residential properties
http://www.cr.nps.gov/hps/tps/tax/

The Federal Government offers a variety of tax credits that assist preservation projects, notably a credit that is available only for rehabilitation of income-producing historic properties.

Under this historic preservation tax credit, property owners who rehabilitate historic buildings for commercial, industrial, agricultural, or rental residential purposes can receive a tax credit equal to 20 percent of the rehabilitation costs. The National Park Service must certify that the rehabilitation work meets the Secretary of the Interior's Standards for Rehabilitation. Since the inception of the tax credit in 1976, it has generated over $40 billion in historic preservation activity.

Other Federal tax credits can also be used in preservation projects and can be combined with the historic preservation tax credit. For example, there is a Federal tax credit for acquisition, construction, or rehabilitation of low-income housing. From 2001 to 2005, 43,566 low and moderate income housing units were created in historic properties using the low-income housing tax credit in conjunction with the historic preservation tax credit.

For case studies illustrating how the credits have been combined, visit http://www.cr.nps.gov/hps/tps/Affordable/

The New Markets Tax Credit, may also offer similar opportunities. The credit is targeted at drawing investment to businesses and commercial projects in distressed urban, rural, and suburban communities. To learn more, visit http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5.

Tax Deductions for Preservation Easements
Recipients: Property owners
http://www.cr.nps.gov/hps/tps/tax/easement.htm

Donation of a conservation easement on property generally qualifies as a charitable contribution for Federal tax purposes, and thus would result in income and estate tax deductions. This provision of Federal tax law thus provides a cash incentive to owners of historic properties to protect them through donations of easements.

Posted May 19, 2008

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