Federal Rehabilitation Investment Tax Credit
The Federal Rehabilitation Investment Tax Credit (RITC) is a federal income tax credit equal to 20 percent of qualified rehabilitation expenses. It is available ONLY for income-producing properties.
Federal Tax Incentives
- Basic Info
- Related Information
Federal tax incentives are available for owners of an income producing historic property who carry out a substantial rehabilitation.
- Federal Rehabilitation Investment Tax Credit (RITC), 20 percent
A federal income tax credit equal to 20 percent of the project's qualified rehabilitation expenses available ONLY for income-producing properties. All properties must be listed in, or eligible for, the National Register of Historic Places, either individually or as part of a National Register Historic District. Project work must meet the Secretary of the Interior’s Standards for Rehabilitation.The application is first reviewed by the Historic Preservation Division (HPD), then forwarded to the National Park Service for review and approval. This program is available nationwide. - Charitable Contribution Deduction
The charitable contribution deduction is taken in the form of a conservation easement, and enables the owner of a “certified historic structure” to receive a one-time tax deduction. A conservation easement ensures the preservation of a building’s facade by restricting the right to alter its appearance. Qualified professionals should be consulted on the matters of easement valuations and the tax consequences of their donation. To be eligible for the charitable contribution deduction, a property must be listed in the National Register of Historic Places, either individually or as a contributing building within a historic district. If located in a National Register Historic District, a Part 1 must be submitted to HPD for review and certification by NPS
Additional Resources:
- The National Trust Community Investment Corporation – Provides information on various project financing options. There are also many for-profit limited liability companies (LLCs) that provide consulting services for developers, allowing them to monetize federal and state tax credits, thus creating project equity.
- Economic Impact of Federal Tax Credits (2015) (pdf)
Case studies
NOTICE: On December 22, 2017, Public Law No: 115-97 (Pub. L. 115-97) was signed and enacted, amending the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. Pub. L. 115-97 (Sec. 13402) modifies the 20% Historic Rehabilitation Tax Credit as well as provides certain transition rules. These and other changes to the Internal Revenue Code may affect a taxpayer's ability to use the 20% Historic Tax Credit. Pub. L. 115-97 also repeals the 10% Rehabilitation Tax Credit for non-historic buildings. The text of Pub. L. 115-97 is available at www.congress.gov. Applicants requesting historic preservation certifications by the National Park Service as well as others interested in the use of these tax credits are strongly advised to consult an accountant, tax attorney, or other professional tax adviser, legal counsel, or the Internal Revenue Service regarding the changes to the Internal Revenue Code related to Pub. L. 115-97. Technical Preservation Services National Park Service
