Senators Blanche Lincoln (D-AR) and Olympia Snowe (R-ME), along with Reps. Allyson Schwartz (D-PA) and Pat Tiberi (R-OH) have introduced legislation that would make a number of legislative changes to the federal historic rehabilitation tax credit.  Key provisions in H.R. 3715 and S. 1743 include:

  • Assist smaller projects. The credit rate would be increased to 30% for projects with qualified rehab expenditures of $5 million or less. A second change would permit, for these smaller projects, the creation of a certificate that could be freely transferable. This would permit the sale of certificates for equity to parties that don’t have an ownership interest in the rehabilitated property, as is now required.
  • Permit moderate rehabilitation projects. The minimum amount of rehab expenditures (over a 24-month period) needed to qualify for the historic credit would be reduced from the current threshold of $5,000 or 100% of the adjusted basis of the building, whichever is greater, to $5,000 or 50%.
  • Remove restrictions on projects with tax-exempt tenants. Three of the four current “disqualified use” rules would be repealed, to qualify a renovated building for historic credits even if more than 50% of the space is leased to nonprofit and/or governmental tenants. Only the sale-leaseback rule would remain.
  • Create a “green” add-on credit. Owners would receive extra tax credits for a portion of the costs of energy-saving “green” improvements made in conjunction with the historic rehab of a building.

Additional amendments would:

  • Amend the 10% credit to make it available for all buildings more than 50 years old, including buildings rehabbed for residential rental use.
  • Ensure that state historic tax credit proceeds aren’t subject to federal income tax.

NH&RA’s Historic Preservation Development Council, a joint effort between NH&RA and the National Trust for Historic Preservation, has joined the Historic Tax Credit Coalition and other industry groups in supporting this important legislation. Read more…