Owners of properties that are listed in or eligible for the National Register of Historic Places may take advantage of a 20% Federal tax credit that has become the most important incentive for historic preservation at a national level. The Federal Historic Rehabilitation Tax Credit program is administered by the National Park Service and the State Office of Historic Preservation. The credit equals 20% of the amount spent on qualifying historic rehabilitation expenditures (both hard and soft costs). The credit is only available to income-producing properties (commercial, industrial, agricultural, and residential rentals), not for owner-occupied housing.
Building owners must complete a three-part application process to qualify for the credit. In Part 1, the applicant verifies that the property is listed in or eligible for the National Register. Part 2 provides a description of the proposed work for approval, utilizing the Secretary of the Interior’s Standards for Rehabilitation. Part 3 compares the actual project work with the Part 2 description and verifies that the project has met the Standards.
During the past decade, hundreds of California buildings have been rehabilitated with the assistance of tax credits, generating over a half of billion dollars in private investment in the State of California. For more information about federal income tax credits for National Register properties, contact the National Park Service or the State Office of Historic Preservation.