Highlighted Project
Historic
Preservation Tax Incentives
Historic Preservation Tax Incentive programs are among the most successful and cost-effective community preservation tools available today. These programs foster private sector rehabilitation of historic buildings and provide a strong alternative to government ownership and management. Rehabilitation projects generate jobs, both during the construction phase and in the spin-off effects of increased earning and consumption. The majority of eligible buildings are located within historic core areas of cities and towns, and the investment in their revitalization results in enhanced property values and greater revenues for local and state government through increased property, business, and income taxes. The adaptive use of abandoned or underutilized historic buildings that would otherwise deteriorate beyond repair is vital to maintaining the historic fabric that lend cities, towns, and rural areas their special character.
The Federal Historic Preservation Tax Incentives program provides a 20 percent federal income tax credit for the substantial rehabilitation of certified historic commercial income producing properties. In order to qualify for the credits, the property must be listed in the National Register of Historic Places, either individually or as a contributing property in a historic district, and the rehabilitation must be done in accordance with the Secretary of the Interior’s Standards for Rehabilitation. Information about interpreting the Secretary of the Interior’s Guidelines is available on the World Wide Web at www2.cr.nps.gov/tps/tax/rhb. The tax credit can be applied to all qualified rehabilitation expenses and results in a dollar for dollar reduction in the owner’s federal income tax.
The states of Rhode Island and Massachusetts have developed tax incentive programs that are similar in structure to the Federal program, but apply to the amount owed in state income taxes. There are two rehabilitation tax credit programs available to historic property owners in Rhode Island—the Rhode Island Historic Preservation Tax Incentive program, which offers a 30 percent state income tax credit for commercial income producing properties, and the Rhode Island Historic Homeowner Tax Credit program, which provides a 20 percent credit for costs associated with the rehabilitation of the exterior of their houses. The Massachusetts Historic Rehabilitation Tax Credit program provides a credit of up to 20 percent of the costs of a substantial rehabilitation to a certified commercial income producing property.
PAL specializes in preparing the three-part Historic Preservation Certification Application (HPCA) that is required to certify a rehabilitation project under the state and federal tax laws. Throughout the process, PAL serves as the client’s liason with the SHPO and works to ensure proper communication and the timely submittal of products. Part 1, the Evaluation of Significance/Request for Historical Certification, certifies that the building is historic, meaning that it is listed or eligible for listing in the National Register. PAL conducts the research and photography necessary to document the property’s significance. If the property is not yet listed in the National Register, PAL can prepare the National Register nomination application and coordinate with the SHPO to make sure the property is listed before the rehabilitation project is completed, as required by law.
The Part 2, Description of Rehabilitation/Request for Certification of Proposed Rehabilitation application, provides the agencies with information about the proposed plans for the Project. PAL works with the project architects to prepare restoration/rehabilitation plans that comply with the Secretary of the Interior’s Standards for Rehabilitation and completes a survey of existing conditions before construction. This information is used to describe the project and is illustrated with photographs, plans, and material specifications that describe in detail the nature of the rehabilitation. If the original plans for the rehabilitation change during the course of the project, PAL prepares the necessary documentation and amends the Part 2 application.
The Part 3, Request for Certification of Completed Work application, certifies that the work was done in the manner proposed in the approved Part 2 application. PAL conducts a site visit to document the completed rehabilitation by taking the same general photographic views as those in the Part 2.
For more information download PAL's Historic Tax Credit Brochure.