December 21, 2012 Do You Really Know How Historic Tax Credits Work?
The federal historic tax credit program is administered by each state’s historic preservation office and requires approval from the National Park Service, a division of the U.S. Department of the Interior. Developers seeking the credit must go through a three-part application process (or two-part, if the building is already listed on the National Register of Historic Places) governed by regulations and procedures of the National Park Service and IRS. Before approving the application, the State Historic Preservation Office and the National Park Service review the rehabilitation work to ensure that it complies with the Secretary of the Interior?s Standards for Rehabilitation and that the rehabilitated building is consistent with the historic character of the property or the district in which it is located. Once approved, the developer may claim a tax credit equal to 20% of the qualifying rehabilitation expenses.