Contact UsI have a client who owns a sizable portfolio of commercial real estate that is currently undergoing large-scale renovations. Many of these aforementioned buildings are older properties. Can someone please assist me with understanding if preservation tax incentives could apply to reduce the costs of my client’s renovations?
Federal Tax Incentives
Historic Tax Credits
Rehabilitation Tax Credit
Preservation Tax Incentives
SALT Incentives
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Tax Professional Answers
Peter Scalise, SAX LLP
Yes, and as a synopsis there are two categories of federal-level preservation tax credits as outlined below:
• Pursuant to I.R.C. § 47(a)(1), the Rehabilitation Tax Credit offers a 10 percent credit available for the rehabilitation of non-historic buildings with an additional requirement that the building must have been originally constructed before 1936; or
• Pursuant to I.R.C. § 47(a)(2), the Historic Tax Credit offers a 20 percent credit available for the rehabilitation of a Certified Historic Structure (e.g., one listed on the National Register of Historic Places or located in a Registered Historic District and determined to be of significance to the Historical District).
These preservation tax incentives can significantly reduce a property owner’s perceived costs for the renovation of an older building and should certainly be considered when planning a renovation project. In addition, it should be duly noted that most states now offer preservation based tax incentives at the state level (e.g., such as ME, NH, VT, MA, RI, CT, NY, PA, DE, MD, WV, VA, NC, SC, GA, FL, MS, LA, AR, MO, IA, MN, WI, IN, KY, MI, OH, ND, KS, OK, CO, NM, UT & MT with several remaining states introducing legislation that would create a similar program in NJ, AL, IL, and TX) which can be utilized in conjunction with the federal-level incentives to further reduce the expenditures of a property owner’s renovation.
Please contact me directly to discuss your clients fact pattern and also consult my published article:http://taxconnections.com/taxblog/reduce-property-owners-expenditures-for-renovation/#.U7GKBZ3D-Uk
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524 weeks ago
• Pursuant to I.R.C. § 47(a)(1), the Rehabilitation Tax Credit offers a 10 percent credit available for the rehabilitation of non-historic buildings with an additional requirement that the building must have been originally constructed before 1936; or
• Pursuant to I.R.C. § 47(a)(2), the Historic Tax Credit offers a 20 percent credit available for the rehabilitation of a Certified Historic Structure (e.g., one listed on the National Register of Historic Places or located in a Registered Historic District and determined to be of significance to the Historical District).
These preservation tax incentives can significantly reduce a property owner’s perceived costs for the renovation of an older building and should certainly be considered when planning a renovation project. In addition, it should be duly noted that most states now offer preservation based tax incentives at the state level (e.g., such as ME, NH, VT, MA, RI, CT, NY, PA, DE, MD, WV, VA, NC, SC, GA, FL, MS, LA, AR, MO, IA, MN, WI, IN, KY, MI, OH, ND, KS, OK, CO, NM, UT & MT with several remaining states introducing legislation that would create a similar program in NJ, AL, IL, and TX) which can be utilized in conjunction with the federal-level incentives to further reduce the expenditures of a property owner’s renovation.
Please contact me directly to discuss your clients fact pattern and also consult my published article:http://taxconnections.com/taxblog/reduce-property-owners-expenditures-for-renovation/#.U7GKBZ3D-Uk