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FEDERAL & STATE HISTORIC TAX CREDITS

FEDERAL & STATE HISTORIC PRESERVATION TAX CREDIT APPLICATIONS


State and federal historic tax credit ("HTC") incentives provide a critical funding source for the rehabilitation of historic properties. Urban Development Corporation ("UDC") guides property owners through the complex application and review process to obtain historic tax credits.


The three-part Historic Preservation Certification Application ("HPCA") is administered by the State Historic Preservation Office ("SHPO") at the state level, which has review and comment authority, and by the National Park Service ("NPS") that makes the final decision at the federal level.


The team at UDC works closely with project teams to provide guidance on appropriate rehabilitation measures that meet the needs of the client, prepares all components of the HPCA, and coordinates with state and federal agencies throughout the review and approval process.


Federal Historic Tax Credit Program


The 20% Federal Historic Rehabilitation Tax Credit is administered by the NPS and the Internal Revenue Service ("IRS") to promote the rehabilitation of historic buildings throughout the country. Under this program, 20% of the total qualified rehabilitation expenditures (QREs) are returned to the owner in the form of a dollar-for-dollar credit on federal income taxes. The types of qualifying projects are listed below.


​State Historic Tax Credit Programs

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Virginia has established a state HTC program to provide additional financial incentives for the rehabilitation of historic structures. The program closely mirrors the federal HPCA process and can be used in conjunction with the federal HTC.


Successful certification of the completed project and acquirement of subsequent tax benefits are dependent on all interior and exterior rehabilitation work meeting the Secretary of the Interior’s Standards for Rehabilitation.


Information about the program from NPS Technical Preservation Services can be found here.

Types of Qualifying Projects

  • The building must be at least 50 years old.
  • The building must be listed on the National Register of Historic Places (either individually or in a district), or be in a federally certified local district, to claim the credit. Any building that is a minimum of 50 years old and retains some of its original integrity may qualify for designation.
  • The building must be an income-producing property, such as an office, rental apartment, hotel, retail, or industrial. Owner-occupied residences do not qualify.
  • The combined hard and soft costs QREs or eligible costs on which the 20% credit is based, must exceed the developer’s adjusted basis in the building.
  • Work must be reviewed and certified by the NPS.