Federal, state, and local tax incentives exist for owners of historic properties. The Federal Historic Preservation Tax Incentives Program includes a 20 percent income tax credit for the rehabilitation of historic, income-producing buildings and a 10 percent income tax credit for rehabilitation of non-historic buildings. The new Texas Historic Preservation Tax Credit Program offers a 25 percent tax credit for the rehabilitation of historic buildings.
Additionally, a state sales tax exemption on labor is available for work to buildings listed in the National Register of Historic Places. County and local taxing authorities may grant property tax exemptions for buildings with state or local historical designations.
Reinvested in the Texas economy through the federal rehabilitation tax credit program from 1979 to 2012
Tax Legislation Changes Affect the Federal Tax Credit Program (December 2017)
On December 22, 2017, Public Law No: 115-97 (Pub. L. 115-97) was signed and enacted, amending the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.
Pub. L. 115-97 (Sec. 13402) modifies the 20% Historic Rehabilitation Tax Credit as well as provides certain transition rules. These and other changes to the Internal Revenue Code may affect a taxpayer's ability to use of the 20% Historic Tax Credit.
Pub. L. 115-97 also repeals the 10% Rehabilitation Tax Credit for non-historic buildings. The text of Pub. L. 115-97 is available at www.congress.gov.
Applicants requesting historic preservation certifications by the National Park Service as well as others interested in the use of these tax credits are strongly advised to consult an accountant, tax attorney, or other professional tax adviser, legal counsel, or the Internal Revenue Service regarding the changes to the Internal Revenue Code related to Pub. L. 115-97.
State Tax Credit Program Highlights: Certified Projects
The THC tax credit team is pleased to unveil its new certified project webpages, which provide descriptions and photos of projects certified for the Texas Historic Preservation Tax Credit. We hope these pages not only show off these great finished projects, but also inspire future tax credit projects.
The intent of these project highlights is to allow other potential applicants to see the range and type of projects that have been certified to date. We’ve included historical notes, a project description, information on use and project cost (when released by the owner) and have annotated photos which describe pre-existing conditions, particular design challenges or notes on eligibility of project costs.
In the first two and a half years of the state tax credit program, which began in January 2015, the THC has certified 57 projects, with qualified construction and development costs of $482 million. Projects have been completed at 47 different buildings (several are phased projects, with multiple applications for a single building), in 22 cities and towns across the state.
The National Trust has already recognized the value of this effort and indicates that no other state has promoted its program’s successes to this extent. We are happy to offer this opportunity for the public to have insights into these extraordinary projects and will update these listings on a regular basis.