Are there any readers of this forum that have used "Federal Tax Credits for Rehabilitating Historic Buildings". I would interested in hearing what your experience was like. The tax credit sounds interesting, the paperwork sounds intensive and lengthy.
I would like to bump this post. Doesnt sound like anyone knows how to utilize the tax credits ( state and federal ) for renovation projects.
I would be interested in this too. Currently looking at a project that might qualify
I am also evaluating a property that I've confirmed is on the national historic registry and might qualify for the credit.
Can anyone give me an example of how this tax credit is applied? Is it 20% of the after-rehab value? Or 20% of qualifying rehab costs? An example purchase price + rehab costs scenario would be helpful.
Hi @Ed Jaroch and @Elliot B. + @RaeLena Morrison I'm under contract on a HPTC project now and learning A TON, so I'm not expert but have spoken to more experienced developers and architects. This is a very complex niche. The credits apply to only the Qualified Rehab Expenses (QREs) NOT acquisition or ARV. So if you buy for 100K, have 500K of QRE and the renovated building appraises for 1M, your credits are based on the 500K. My advice thus far is don't get near one of these without bringing on architects, historic consultants, lawyers (gonna be pricey) and accountants who are experts in HPTCs. If anyone reading has more experience, I'd love to connect!
@Dave Holman Do you have any update on this property? We are just running numbers now on a historic property and would love any info you have!
Hi All - I work as a historic tax credit consultant, so I'm pretty familiar with the process.
Some of the highlight of the Historic Tax Credits: the building needs to be eligible or listed on the National Register of Historic Places, the project has to be a substantial renovation (meeting 100% of the basis of the building (building only, not land)), the building needs to be income producing and cannot be sold during the 5 year recapture period (without consequence), all work will need to be reviewed by the State Historic Preservation Office and National Park Service and be in accordance with the Secretary of the Interior Standards for Rehabilitation (which can add time), you can often combine state and federal credits. There are so many details that it's hard to summarize in a forum post!
As @Dave Holman mentioned - It can be a lengthy process and hard to make the numbers work if the project is too small because of the team required to make it happen. I love the program and have seen a lot of great outcomes, but it's tricky on a small scale.
@Cian Hamill I recall it being in the 10-20K range for most projects, but it will vary by consultant and project. Sometimes the architect can take on some of the elements of it but I tried that and wouldn't recommend it- an specialist should do it 100%.