Cherrytree Group LLC Blog

The Historic Rehabilitation tax credit deadline is fast approaching with 2013 arriving next week.

The Massachusetts Historic Rehabilitation Tax Credit is an exciting part of the preservation toolkit. Under the program a certified rehabilitation project on an income-producing property in a historic building is eligible to receive up to 20% of the cost of the rehabilitation expenditures in state tax credits. There is an annual cap, so there is selection criteria that ensures the funds are distributed to the projects that provide the most public benefit. The MHC (Massachusetts Historic Commission) certifies the projects and allocates available credits.

Important Note about Deadlines

In order to be considered for allocation of funds, Part I and Part II must be submitted to the MHC by the application deadline.  The deadlines each year are: April 30, August 31, and January 15.

For more information or assistance in submitting your tax credit, contact The Cherrytree Group.

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In the Boston area, there are many projects that involve the rehabilitation of historic buildings. For the application of or the completion of a historic tax credit sale, tax credit consultants and brokers can facilitate the deal.

Owners of properties listed in historic districts may be eligible for a 20% federal investment tax credit and state historic tax credits for the rehabilitation of income-producing, commercial, industrial or residential certified historic structures. For more information contact The Cherrytree Group.

The Cherrytree Group can arrange for both the forward commitment to purchase, and the ultimate sale of the historic tax credits. The tax credits can be an integral part of the financing of projects entailing the rehabilitation of historic buildings.
 
The Cherrytree Group can provide a valuable link to a reputable investor. Our involvement in the tax credit transaction makes the process transparent and more affordable.

…by Warren Kirshenbaum

The Louisiana Main Street program resides in the Louisiana Division of Historic Preservation. Louisiana has 34 designated local Main Street communities. Main Streets apply a four-point approach to the revitalization of their historic commercial districts: organizational development, design and preservation, economic development and promotion.

In order to facilitate preservation, federal and state tax credits exist for commercial historic rehabilitation.
The purpose of tax credits is to encourage the preservation of historic buildings through incentives to support rehabilitation of historic and older buildings.

What is a tax credit?
A tax credit is a direct, dollar for dollar, reduction in the amount of money a taxpayer must pay in taxes for a given year. For example, if a taxpayer owes $5,000 in taxes to the Internal Revenue Service, but has a $3,000 credit, he only pays $2,000. A credit is much better than a deduction which merely reduces a taxpayer’s income and puts him in a lower tax bracket.

Federal Historic Rehabilitation Tax Credit

• The Federal Rehabilitation Tax Credit is for 20 percent of the costs of rehabilitation expenses for an income producing building.
• The credit is available for income-producing properties that are contributing elements to a National Register Historic District, or individually listed on the National Historic Register. All properties must be certified by the National Park Service.
• To qualify, the rehabilitation work must exceed the adjusted basis for the building (either the purchase price minus the value of the land, or the current depreciated value).

• The building must be a contributing element to a Downtown Development District (DDD) or a Cultural District.
• The building must be used for an income-producing purpose.
• Eligible expenses must exceed $10,000.
• This credit may be used in addition to the Federal Historic Rehabilitation tax credits, provided that the most stringent program requirements are met. It may also be combined with the State Residential Tax Credit Program if the building is mixed-use.

...by Warren Kirshenbaum

Just a few years after eliminating a state historic preservation tax credit, Rhode Island lawmakers are considering reviving it as an economic development tool.

Reinstituting the incentive to rehabilitate abandoned mills and empty warehouses would create work for construction companies and trade workers while protecting the state's historic character.

"It will mean jobs for architects, engineers, craftsmen," said Martha Werenfels, a Providence architect who has worked on several historic preservation projects. "Right now projects are not moving forward. They're going to Connecticut and they're going to Massachusetts because there are tax credits available."

The proposal would award tax credits equaling up to 25 percent of the cost of rehabilitating historic buildings for commercial use.

Lawmakers voted to stop giving new credits to commercial preservation projects in 2008. The program cost taxpayers $300 million since it was enacted a decade ago, but supported 237 projects worth more than $1.2 billion, according to the state's Historical Preservation & Heritage Commission.

Local government officials support the tax credit as a way to spur redevelopment in the state's many old mills and commercial buildings. Supporters noted that several companies have turned vacant warehouses and mills into modern corporate headquarters. East Providence Planning Director Jeanne Boyle cited the multimillion-dollar redevelopment of a former industrial site in her city as proof the tax credit works.

"Without the historic tax credit that project never would have happened," she said.

Original article by By David Klepper – Boston.com