Federal and State Tax Credits available for historic properties

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The Hancock Chamber of Commerce Greenways Committee wants all Hancock County businesses to be aware of the Federal and State tax credits that are available for qualified rehabilitation of historic properties.

Todd Sanders of the Mississippi Department of Archives & History (MDAH) says Federal and State tax credits can deliver a way to recoup up to 45% of the cost of rehabbing a historic building by combining the 20% Federal and 25% State tax credits.  Non-historic buildings built before 1936 may qualify for a 10% Federal credit.

A qualified historic rehabilitation must meet 4 requirements:

1)      The property must be listed on the National Register of Historic Places, which includes Contributing Properties in a National Register District.

2)      The property must be income producing (not the owner’s personal place of residence).

3)      ALL work must meet the Secretary of the Interior’s Standards for Rehabilitation (applying to both the building interior, exterior, parking & landscaping).

4)      The rehab must be ‘substantial’:  the greater of $5000 or the total adjusted basis, which is equal to the price of acquisition less land cost plus the cost of improvements less any depreciation already taken.

The application is a 3 part process:

Part 1:

Complete the Evaluation of Significance form (available from MDAH) & submit 2 copies to MDAH before starting any work, keeping an extra copy for your own files.  MDAH reviews and forwards to the regional National Park Service office for their review & approval, as with all subsequent steps.

Part 2:

Complete the Description of Rehabilitation, ideally before any work has started, including 2 sets of 4”x 6” photos & submit to MDAH for review and approval.  Do not remove existing plaster from a brick wall that historically had such plaster.

Part 3:

Complete the Request for Final Certification once the work is complete, including 2 sets of 4” x 6” photos and submit to MDAH for review and approval.

Note that any local preservation district requirements, if applicable, must be met separately in addition to the above.

There are no fees for projects with less than $80,000 of rehab cost.  The fee for projects with rehab costs between $80,000 and $3,849,500 is $845 + .15% of the rehab cost above $80,000, due with the filing of Part 2.  The maximum fee is $6500.

There is no credit recapture as long as the property is held for 5 years.  The state tax credits are relatively straightforward; let Todd Sanders know you are applying for both Federal & state tax credits at time of initial application.  For more information, email or call Todd Sanders at tsanders@mdah.state.ms.us or 601/576-6950.



Questions? Please Contact (228) 467-9048