Historic Tax Credits

The federal Historic Tax Credit (HTC) was legislated in 1981 to reassure the protection and adaptive reuse of historic and older structures. As of 2017, the HTC comprised of two separate tax credits: 1) a 20 percent credit for the rehabilitation costs of buildings listed on the National Register of Historic Places; and 2) a 10 percent recognition for the rehabilitation of non-historic, non-residential buildings built before 1936. The HTC has been a influential, and popular, development tool ever since its beginning. According to the National Trust for Historic Preservation, through the HTC program, over $25 billion in tax credits have been used to reorient over 42,000 buildings countrywide. Succeeding a significant grassroots struggle by safeguarding advocates across the country, the federal tax bill that was passed in December 2017 retained the 20% HTC for qualified rehabilitations of historic structures. The credit, however, was changed in one key respect, namely that the credit must be appealed at a rate of 4% per year over a five-year period. Previously, the 20% credit could be claimed in its total once a project was placed in check. (The bill eliminated the 10% tax credit.)

Scattering the credits over five years will certainly decrease their worth to investors. In 2017, tax credit depositors were typically paying roughly 90 cents on the dollar. The new value is probable to be between 75 and 80 cents on the dollar, an effective value lessening of 11% to 17%. Even so, the Historic Tax Credit remains a considerable financial enticement that is estimated to still be eye-catching to designers.