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.
- Income-producing properties (apartments and commercial buildings) – Federal and NC State tax credits worth a total of 40% of qualified rehabilitation costs.
- Non-income producing properties (privately owned residences) – NC income tax credit worth 30% of qualified rehabilitation costs.
- State Mill Rehabilitation Tax Credit (former industrial sites – income-producing and non-income-producing) – value of the credit depends upon the location of the project.
- Federal New Markets Tax Credits (NMTC) – Projects that qualify for the Federal credit on income-producing properties may also be eligible for the 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.
[toggle title=”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:
- National Parks Service: Technical Preservation Services
- National Trust Community Investment Corporation
- NC State Historic Preservation Office FAQ
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.
[/toggle]
[toggle title=”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.
[/toggle]
[toggle title=”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:
- NC State Historic Preservation Office
- Preservation North Carolina
- 2012 Article 3J County Tier Designations
- NC Department of Revenue Code (PDF)
- NC Statute (PDF)
Contact NC SHPO directly for more information. Provide your name, address, and name and location of your property.
[/toggle]
