Changes coming to the State Income Tax Credit program
The additional categories are for large projects completed after January 1, 2017 that (1) qualify for up to $5 million in income tax credits based on total “qualified rehabilitation expenditures” (QRE) and (2) qualify for up to $10 million in income tax credits based on total QREs with additional employment or annual payroll requirements. While projects that do not exceed the existing program $300,000 credit cap for an individual project are not affected, these “large” projects are subject to an annual aggregate program cap of $25 million (no matter the number of projects that apply or whether they are subject to a $5 million or $10 million project cap, only $25 million in credits will be available in a given year).
The changes brought about by HB 308 require the Department of Natural Resources (DNR) to revise the regulations governing the program. This process must follow procedures established by the Georgia Administrative Procedure Act (O.C.G.A 50-13), includes consultation with the Department of Revenue, and requires adoption of the revised regulations by the DNR Board. The Historic Preservation Division, as administrator of the program, will be working on revising the regulations, revising program applications, and developing guidelines during the summer and fall of 2015.
State and federal government tax incentives are available for owners of a historic property who carry out a substantial rehabilitation. All properties must be listed in, or eligible for, the National/Georgia Register of Historic Places, either individually or as part of a National /Georgia Register Historic District. Project work must meet the Secretary of the Interior’s/Department of Natural Resources Standards for Rehabilitation.
2. State Preferential Property Tax Assessment for Rehabilitated Historic Property – Freezes the county property tax assessment for over 8 years. Available for personal residences as well as income-producing properties. Owner must increase the fair market value of the building by 50 – 100%, depending on its new use. more
3. State Income Tax Credit for Rehabilitated Historic Property – A state income tax credit of 25% of rehabilitation expenses. The credit is capped at $100,000 for personal residences and $300,000 for income-producing properties. This program’s percentages and caps are effective for projects completed after January 1, 2009. more
The Federal Historic Tax Credit: Transforming Communities is a report commissioned by the National Trust for Historic Preservation that examines the catalytic impact that the rehabilitation of historic buildings has on the community. The report highlights a number of projects that made use of the historic tax credit, including Atlanta's Ponce City Market and Macon's Macon Lofts. - June 2014