Historic Tax Credits

Historic Tax Credits

Whether you are renovating your own historic home – or rehabilitating an historic building for a commercial purpose – a variety of Federal and state tax credit are available to support preservation efforts. Since 1976, these incentives have spurred over $1 billion of investment in historic properties in the state of North Carolina.

  • For income-producing properties, such as apartments and commercial buildings where spaces are rented, both the Federal government and the state of NC offer 20% income tax credits against the qualified rehabilitation of such properties, for a total potential income tax credit worth 40% of qualified expenses.
  • For non-income producing properties, such as a privately owned residence, the state of North Carolina provides a 30% income tax credit against qualified rehabilitations.
  • Former industrial sites may take advantage of the new State Mill Rehabilitation Tax Credit. These credits may be taken for the rehabilitation of both income and non-income producing properties. The value of the credit depends upon the location of the project.
  • Projects that qualify for the 20% Federal credit on income-producing properties may also be eligible for the Federal New Markets Tax Credits (NMTC). To access NMTCs you must work through qualified Community Development Entities (CDEs). For more information about the NMTC program and to find a CDE serving your community, visit the CDFI Fund’s website.


Income-Producing Properties

Eligible income-producing property, before and after rehabilitation

Income-producing properties are properties that are rehabilitated for commercial, industrial, agricultural, or rental residential purposes. Eligible properties have to be certified historic structures, meaning they are either:

  • Individually listed on the National Register of Historic Places
  • Located in a Federally registered historic district as a contributing building; or
  • Deemed a “certified historic structure” after application to and review by the National Parks Service.

Both the Federal government and the state of NC offer 20% income tax credits against the qualified rehabilitation of such historic, income-producing properties. For example:

Total project expenses $600,000
Qualified rehabilitation expenses $325,000
Federal tax credits available (@20%) $65,000
NC state tax credits available (@20%) $65,000
Total Income tax credit incentive $130,000

 

To learn more about the Federal Rehabilitation Tax Credits visit:

To learn more about NC State Rehabilitation Tax Credits visit:

Contact NC SHPO directly for more information. Provide your name, address, and name and location of your project.

 

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Non-Income Producing Properties

 

Eligible residential space, before and after rehabilitation


The state of North Carolina provides a 30% income tax credit incentive for the rehabilitation of eligible non-income producing properties, which includes private residences.  Homeowners must make a minimum investment of $25,000.  For example:

Total project expenses $100,000
Qualified rehabilitation expenses $50,000
NC state tax credits available (@30%) $15,000

 

Eligible properties include:

  • Individually listed on the National Register of Historic Places;
  • Located in a Federally registered historic district as a contributing building; or
  • Contributing buildings within one of the state’s three certified local historic districts in Raleigh, Goldsboro, or Madison.

To learn more about NC State Rehabilitation Tax Credits for homeowners visit:

Contact NC SHPO directly for more information. Provide your name, address, and name and location of your property.

 

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NC State Mill Rehabilitation Tax Credits

 

After an enormous rehabilitation, West Village is now home to luxury lofts

The North Carolina “mills bill” passed in 2006 established a credit to encourage the rehabilitation of the state’s many of abandoned textile, tobacco and furniture plants.  The mill rehabilitation tax credit provides up to a 30-40% state tax credit for the certified rehabilitation of income-producing historic structures, depending on the development tier of the county in which the structure is located.  The mill credit may be combined with the 20% Federal preservation tax credit, but cannot be combined with the NC state historic rehabilitation tax credit.  For example, for a project in a tier 1 or 2 county:

Total project expenses $300,000,000
Qualified rehabilitation expenses $1,500,000
Federal tax credits available (@20%) $300,000
NC state tax credits available (@40%) $600,000
Total Income tax credit incentive $900,000

 

Mill tax credits are also available for the rehabilitation of non-income-producing historic mill properties in tier 1 and 2 counties.  Eligible properties must meet all of the following conditions:

  • Individually listed on the National Register of Historic Places;
  • Is located in a Federally registered historic district as a contributing building or is a State-certified historic structure;
  • Used as a manufacturing facility or for purposes ancillary to manufacturing, as a warehouse for selling agricultural products, or as a public or private utility; and
  • It has been at least 80% vacant at least two years immediately preceding the date the “eligibility certification” is made.

To learn more about NC State Rehabilitation Tax Credits for homeowners visit:

Contact NC SHPO directly for more information. Provide your name, address, and name and location of your property.

 

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