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The Rehabilitation Investment Tax Credit (RITC) offers financial incentives to income-producing property owners for the rehabilitation of historic buildings listed in, or eligible for, the National Register of Historic Places. The tax credits are given to the property owner for 20% of the rehabilitation cost (10% for “non-historic” properties) on their federal income-tax returns.
To be eligible for the 20% credit, several requirements must be met:
- The building must be listed in, or eligible for, the National Register.
- The project must meet a “substantial rehabilitation test” where the amount spent on rehabilitation is greater than the building’s adjusted basis and at least $5,000 with work completed in two years.
- The building must be used for income-producing purposes for 5 years following rehabilitation.
- All construction and repair work must follow preservation standards and guidelines established by U.S. Secretary of the Interior, generally requiring the preservation of significant elements and features.
It is strongly encouraged that property owners interested in the RITC seek technical assistance early in a project’s development and especially before work begins. The RITC program requires review at both the state and federal level. Contact the NEGRDC’s Preservation Planner bwalker@negrdc.org for further information or the state tax-incentive coordinator (http://www.gashpo.org).
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