A lot of states offer tax credits or other perks if you want to renovate a historic home. These programs can really take the sting out of repair costs, making it a bit less intimidating to keep those old buildings looking sharp.
Some states even hand out refundable tax credits, so you might get back a chunk of what you put into restoring your place.
The best deals usually come from states with strong historic preservation programs. They tend to support both homeowners and commercial property owners.
Depending on the amount of work you do and the local rules, you could qualify for different credits. It’s worth knowing which states roll out the red carpet for historic property owners.
Key Takeways
- Some states offer refundable tax credits to lower renovation costs.
- Incentive programs vary by state and property type.
- Eligibility rules and application steps differ across programs.
Top States for Historic Home Renovation Incentives
Several states really step up with financial support for historic home renovation. Tax credits and rebates are the main tools here.
Each state sets its own rules on who’s eligible, how much you can get, and what kind of projects count.
California’s Historic Preservation Programs
California has a state historic rehabilitation tax credit that lines up with the federal credit. You can claim up to a 20% tax credit on qualified rehab expenses.
This one’s for certified historic structures used for income-producing stuff—think rentals or commercial spaces.
California also throws in some local grants and technical help. They want you to keep the historic vibe, so you’ve got to follow the Secretary of the Interior’s Standards.
You’ll need to register your project and meet a few criteria. It’s all about keeping that historic charm alive.
Maryland’s Rehabilitation Tax Credits
Maryland offers a 25% state tax credit for qualified rehab expenses on historic homes and commercial buildings. The property has to be on the state or national historic register.
If you live in the house, you can still claim the credit. It’s refundable, too—so if your credit is bigger than your tax bill, you actually get paid the difference.
Projects have to stick to state guidelines. Plans need approval before you start swinging any hammers.
Texas Tax Incentives for Historic Properties
Texas chips in with a 25% state preservation tax credit for fixing up certified historic buildings. This covers both homes and commercial properties on the National Register of Historic Places.
There’s a minimum spend, and you have to keep the building’s historic look. The Texas Historical Commission checks that your renovations fit their standards.
The program stacks with the federal credit, so you can double up on benefits. Texas also offers technical help and design reviews if you need a hand.
Types of Incentives Offered by Leading States
States offer a mix of financial help for renovating historic homes. Tax credits, grants, and property tax reductions are the big three.
Each one comes with its own set of rules and quirks.
Federal and State Tax Credits
Tax credits cut down your tax bill. The federal Historic Tax Credit (HTC) gives you a 20% credit for certified rehab of historic buildings.
That’s a pretty big deal for income-producing properties—think rentals or businesses.
Many states add their own credits on top, usually between 20% and 30% of your renovation costs. Some require the building to be a certain age or officially historic.
You’ll need to meet standards for preserving the building’s character. Approval from your State Historic Preservation Office (SHPO) is usually part of the process.
Grant Programs for Architectural Restoration
Some states hand out grants to help cover costs for restoring historic features. Unlike tax credits, grants give you money upfront.
These grants often target stuff like original windows, façades, or structural fixes. You might apply directly or through a local preservation group.
There can be income limits, neighborhood restrictions, or preservation rules. Grants can be competitive, so you’ll want to put some effort into your application.
Property Tax Abatement Initiatives
Property tax abatements let you pay less in property taxes after you renovate a historic home. It’s a way to save money over several years.
Usually, abatements last 5 to 10 years and only apply to the increase in value from your improvements. The original value stays taxed at the standard rate.
You’ll need approval from a local historic commission. These programs are especially popular in cities that want to keep their old neighborhoods intact.
Eligibility Requirements and Application Processes
You’ll need to know what makes your property eligible and what steps to take to snag those incentives. There’s paperwork, rules, and sometimes a bit of a waiting game.
Criteria for Property Eligibility
Your place usually needs to be listed as historic—either nationally or at the state level. Most programs want the building to be at least 50 years old and still looking like its old self.
You have to plan a rehab that keeps the building’s historic character. If you’re just slapping on vinyl siding or gutting the place, you might not qualify.
Some states add extra hoops, like only allowing properties in certain historic districts. It’s smart to double-check your state’s criteria before you get too far.
Application Steps for Homeowners
First, figure out if your project qualifies for state or federal tax credits. Then get in touch with your state historic preservation office to start the process.
Most states have a multi-step application. For example, Connecticut wants you to submit preliminary forms, detailed plans, and cost estimates in stages.
You’ll probably need to show your project meets historic standards, and you might need approval before starting work. Keep an eye on deadlines and state funding caps—those can sneak up on you.
Documentation and Compliance Guidelines
You must submit written plans that clearly describe your rehabilitation work. These plans should show how you’ll keep historic features intact.
Keep records of all expenses related to the renovation. Receipts, invoices, and contracts might be needed to prove your investment.
Following state and federal rules is crucial. You may need to allow inspections during or after the project to verify compliance.
If you don’t meet documentation standards, you could lose your credit—so keep your paperwork organized. It’s not worth risking all that effort over missing files.
