Federal Historic Preservation Tax Incentives
A federal tax credit worth 20 percent of the eligible rehabilitation costs is available for buildings listed in the National Register of Historic Places. A building needs to be eligible for listing at the beginning of the rehabilitation project, but need not be officially listed until the tax credit is claimed by the owner.

Eligible Buildings and Costs
The work undertaken as part of the project must meet The Secretary of the Interior's Standards for Rehabilitation. The tax credit is available only for income-producing properties. For example, office, retail, hotel and apartments are eligible. Owner-occupied residential properties are NOT eligible for the credit. The credit is also limited to buildings only; structures such as bridges and silos do not qualify.

The tax credit is designed for substantial rehabilitation projects, not small remodeling projects. The eligible project costs generally must exceed the value of the building itself (not including the land) at the beginning of the project. Most rehabilitation costs are eligible for the credit, such as structural work, building repairs, electrical, plumbing, heating and air conditioning, roof work and painting. Some specific costs are NOT eligible for the credit, such as acquisition, new additions, furniture and landscaping.

The Application Process
An application for the tax credits MUST be submitted before the project is completed, although work may begin prior to the application or approval. Ideally the application should be submitted during the planning stages of the work so the owner can receive the necessary guidance to ensure that the project meets the Standards for Rehabilitation, and therefore may qualify for the credits. The application consists of three parts.

Part One, the Evaluation of Significance, determines if the building is eligible for the National Register and thus the credits. Part One is not needed if the property is already individually listed in the National Register.

Part Two describes the proposed work, and photographs are required showing the major features of the building prior to work beginning.

Part Three of the application is submitted upon completion of the rehabilitation.

The tax credit requirements, which include both National Park Service and Internal Revenue Service (IRS) regulations, can appear confusing at times. The Texas Historical Commission staff will assist property owners in understanding and applying for the credits. The IRS also allows a separate 10 percent tax credit for income-producing buildings constructed prior to 1936, but not listed in the National Register.

For more information about tax credits, including a downloadable application and FAQs about the IRS requirements, see the National Park Service web site.