April 09, 2012

Tax Credits for Historic Properties

The State of North Carolina has a program for tax credits for historic preservation and rehabilitation of historic buildings. Here are some highlights of the state tax credit program:

The State offers 30% state tax credits for qualifying rehabilitation /restoration of "non-income producing" historic structures.   20% state tax credits are offered for rehabilitation/restoration of “income producing” historic structures that also qualify for the 20% federal investment tax credit. Combined, these credits can mean a 40% return on costs of a certified rehabilitation of an “income producing” historic building.

Purchasing an historic property as an owner-occupied personal residence in one of Salisbury, North Carolina's TEN Nationally Registered Historic Districts may qualify you for this tax credit!

Key things to note about the state tax credits:
  • Only certified historic structures will qualify for the credits. A “certified historic structure" is defined as a building that is listed in the National Register of Historic Places, either individually or as a contributing building in a National Register historic district. In general, these structures are identified in the National Register nomination reports for each of Salisbury’s historic districts. Copies of these reports are on file at the Rowan Public Library.
  • The rehabilitation of the historic structure must be substantial. For non-income-producing properties, the rehabilitation expense must exceed $25,000 within a 24 month period. For income-producing properties, the rehabilitation expense must exceed the greater of the "adjusted basis" of the building or $5,000 within a 24 month period or a 60 month period for phased projects.
  • All rehabilitation work must meet the Secretary of the Interior's Standards for Rehabilitation.
  • Property owners are strongly advised to consult with the State Historic Preservation Office before beginning a rehabilitation to resolve potential design and rehabilitation problems that could result in denial of the credits.
  • The credits cannot be claimed against the cost of acquisition, new additions, site work, or personal property. Only costs incurred in work upon or within a historic structure will qualify. Interior work such as HVAC work and kitchen and bathroom remodels will qualify if the work meets "The Secretary of the Interior's Standards for Rehabilitation."
c. 1852 Thomas T Maxwell House
For more information about North Carolina State Tax Credits, contact the State Historic Preservation Office in Raleigh at (919) 807-6585 for “income-producing” properties or (919) 807-6574 for “non-income producing” properties. The North Carolina State Preservation Office website (www.hpo.ncdcr.gov/credits.htm) was the source for much of the information in this fact sheet.

To see the many and beautiful historic homes for sale available now in Salisbury that qualify for the NC Preservation Tax Credit, call Greg Rapp at 704.213.6846 today!