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.
State and local tax revenue generated by activity in the federal rehabilitation tax credit program in Texas between 1979 and 2011
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.
2017 Legislation affects tax credit opportunities and public university participation
During the 85th Legislative Session, two bills passed into law that positively impact the state preservation tax credit program. Senate Bill 550 signed into law on May 4 offers an option for a qualifying owner to receive a credit to apply toward either the franchise tax credit or the insurance premium tax liability. This ensures that projects will still have an opportunity for a financial incentive should the Texas franchise tax be reduced or eliminated. House Bill 1003 eliminates the depreciation and non tax-exempt use provisions for institutions of higher education and university systems for a limited period, until 2022. The Commission will be establishing rules to accommodate these statutory revisions in the near future. Read the full text of the bills here: SB550, HB1003