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HISTORIC TAX CREDITS

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Allow our seasoned tax attorneys to assist you in funding and finding creative and innovative ways to maximize your real estate project. Quality Title is the only title company to have an attorney on staff who is a candidate to  graduate from the prestigious NYU Tax LL.M., program, the number one tax LL.M., program in the nation. Real estate and tax law implications reach much further than historic credits and often can be the critical reason a project succeeds or fails. By having an experienced tax attorney available to review all your real estate projects sets Quality Title apart from the ordinary everyday ordinary title company.  

 

The Federal and State Historic Tax Incentive programs encourage investment in the rehabilitation and re-use of historic buildings. Tax credits on qualified expenditures can sometimes make the difference in deciding to undertake the renovation of an investment property.

 

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. The tax credit is calculated on the cost of renovating and restoring the historic property. (in additional to other items the cost of renovating does not include cost of acquiring the property, new additions, landscaping). Credits are not automatically available; an application must be submitted prior to the completion of the project.

 

There are 3 Historic Rehabilitation Tax Programs:

 

THE FEDERAL 20% HISTORIC REHABILITATION TAX CREDIT

 

  • Credit can be used in a single year or carried forward up to 20 years and back 1 year.

  • Income Producing Properties

  • Building must be certified as a historic structure by the National Park Service

  • Building must be considered a contributing element within a National Historic District

  • Must have been built before the end of the period of significance for particular district

  • Must be still recognizable as historic

  • No Credit Cap

  • Rehabilitation expenditures must exceed the adjusted basis of the building. (adjusted basis typically purchase price minus value of land)

 

STATE OF LOUISIANA 25% COMMERCIAL REHABILITATION TAX CREDIT

 

The Louisiana legislature approved the extension to the state’s historic tax credits to January 1, 2022. After January 1, 2018, the state tax credit will be reduced to 20% of qualified expenditures.

 

  • Credit can be used in a single year or carried forward up to 5 years and back 1 year.

  • Income Producing Properties

  • Building must be certified as historic structure by the Division of Historic Preservation

  • Building must be at least 50 years old

  • Located within a Downtown Development District or a Certified Cultural District

  • Must be still recognizable as historic

  • Credit Cap: 5 million per tax payer in a particular district

  • Rehabilitation expenditures must exceed $10,000

 

STATE OF LOUISIANA 18.5% HOMEOWNER REHABILITATION TAX CREDIT

 

  • Rehabilitation expenditures must exceed $10,000

  • $7.2 million statewide cap and $25,000 per structure

  • Property must be a contributing element to National Register District, locally designated historic district, or Downtown Development District

  • If property is vacant and blighted and at least 50 year sold the credit is equal to 36%

  • Must be primary residence

 

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