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Tax Tips for Owners of Historic Buildings

Posted on November 1st, 2019

If you own a historic building you should know about a tax credit called the rehabilitation tax credit, which offers an incentive to renovate and restore old or historic buildings.

Here are seven facts that building owners should know about this credit:

  1. The credit is 20 percent of the taxpayer’s qualifying costs for rehabilitating a building.
  2. The credit doesn’t apply to the money spent on buying the structure.
  3. The legislation now requires that taxpayers take the 20 percent credit spread out over five years beginning in the year they placed the building into service.
  4. The law eliminates the 10 percent rehabilitation credit for pre-1936 buildings.
  5. A transition rule provides relief to owners of either a certified historic structure or a pre-1936 building by allowing owners to use the prior law if the project meets these conditions:
  6. The taxpayer owned or leased the building on January 1, 2018, and the taxpayer continues to own or lease the building after that date.
  7. The 24- or 60-month period selected by the taxpayer for the substantial rehabilitation test began June 20, 2018.
  8. Taxpayers use Form 3468, Investment Credit, to claim the rehabilitation tax credit and a variety of other investment credits.

If you would like more information about the rehabilitation tax credit or any other real estate tax credits you might be eligible for, don’t hesitate to contact our office.

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