Federal, state, and local tax incentives exist for owners of historic properties. The Federal Historic Preservation Tax Incentives Program includes a 20 percent income tax credit for the rehabilitation of historic, income-producing buildings and a 10 percent income tax credit for rehabilitation of non-historic buildings. The new Texas Historic Preservation Tax Credit Program offers a 25 percent tax credit for the rehabilitation of historic buildings.
Additionally, a state sales tax exemption on labor is available for work to buildings listed in the National Register of Historic Places. County and local taxing authorities may grant property tax exemptions for buildings with state or local historical designations.
Historic photo of Dallas Post Office courtesy of 400 North Ervay.
Income generated by federal rehabilitation tax credit projects in Texas between 1979 and 2011
House Bill 3230 Passes
With the conclusion of the 84th Legislative Session in June 2015, a bill has officially been passed to extend eligibility for the Texas Historic Preservation Tax Credit program to non-profit use properties. This bill was introduced by Representative Rodriguez of Bexar County and received its final vote of approval in the Senate on May 24, 2015.
How does this new law change the tax credit program? Previously, non-profit owners could only participate in the program if they rehabilitated a for-profit property. Starting January 1, 2016, non-profit owners may receive tax credits for their own non-profit use properties. We are excited to welcome all new eligible applicants to our state tax credit program, and expect to update our published guidance documents as soon as possible.
Read the full text of the bill here: 84(R) HB 3230
Texas Project Featured in Journal of Tax Credits
The rehabilitation of the mid-century office building at 211 North Ervay in Dallas was highlighted in the September 2014 issue of the Novogradac Journal of Tax Credits. Threatened by demolition following decades-long vacancy, the building was named by Preservation Dallas to their 2004 list of Most Endangered Historic Places. Rehabilitation of the building was made financially viable through the federal and new state historic rehabilitation tax credits. The article, which details the work performed and the project financing, is available below.