# Federal Tax Incentives for Preserving Historic Properties

- Link: https://www.oldhouseguy.com/federal-tax-incentives-for-preserving-historic-properties/
- Published: 2013-01-22T17:54:00-05:00
- Author: Ken Roginski

### Tax Incentives for Preserving Historic Properties

The Federal Historic Preservation Tax Incentives program encourages private sector
investment in the rehabilitation and re-use of historic buildings. It creates jobs
and is one of the nation’s most successful and cost-effective community revitalization
programs. It has leveraged over $62 billion in private investment to preserve 38,000
historic properties since 1976. The National Park Service and the Internal Revenue
Service administer the program in partnership with [State Historic Preservation Offices ](https://ncshpo.org/directory/).**
I recommend contact your SHPO for a discussion first.**

####  20% Tax Credit

A 20% income tax credit is available for the rehabilitation of historic, income-
producing buildings that are determined by the Secretary of the Interior, through
the National Park Service, to be “certified historic structures.” The State Historic
Preservation Offices and the National Park Service review the rehabilitation work
to ensure that it complies with the [Secretary’s Standards for Rehabilitation ](http://www.nps.gov/tps/standards/rehabilitation.htm).
The Internal Revenue Service defines qualified rehabilitation expenses on which 
the credit may be taken. Owner-occupied residential properties do not qualify for
the federal rehabilitation tax credit. Learn more about this credit [before you apply ](https://www.nps.gov/subjects/taxincentives/about.htm).

Each year, Technical Preservation Services approves approximately 1000 projects,
leveraging nearly $4 billion annually in private investment in the rehabilitation
of historic buildings across the country.

#### 10% Tax Credit (repealed)

The 10% tax credit is available for the rehabilitation of non-historic buildings
placed in service before 1936. The building must be rehabilitated for non-residential
use. In order to qualify for the tax credit, the rehabilitation must meet three 
criteria: at least 50% of the existing external walls must remain in place as external
walls, at least 75% of the existing external walls must remain in place as either
external or internal walls, and at least 75% of the internal structural framework
must remain in place. There is no formal review process for rehabilitations of non-
historic buildings. Learn more about this credit in [Historic Preservation Tax Incentives ](http://www.nps.gov/tps/tax-incentives.htm).

#### Tax Benefits for Historic Preservation Easements

A historic preservation easement is a voluntary legal agreement, typically in the
form of a deed, that permanently protects an historic property. Through the easement,
a property owner places restrictions on the development of or changes to the historic
property, then transfers these restrictions to a preservation or conservation organization.
A historic property owner who donates an easement may be eligible for tax benefits,
such as a Federal income tax deduction. Easement rules are complex, so property 
owners interested in the potential tax benefits of an easement donation should consult
with their accountant or tax attorney. Learn more about easements in [Easements to Protect Historic Properties: A Useful Historic Preservation Tool with Potential Tax Benefits ](https://www.oldhouseguy.com/wp-content/uploads/2013/01/easements-historic-properties.pdf).