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 (Sec. of Interior - Link / DNR, PDF).
- Federal Rehabilitation Investment Tax Credit (RITC) – A federal income tax credit equal to 20% of rehabilitation expenses. Available ONLY for income-producing properties. The application is first reviewed by the Historic Preservation Division (HPD), then forwarded to the National Park Service for a final decision. Program is available nationwide. See more
- State Preferential Property Tax Assessment for Rehabilitated Historic Property – Freezes the county property tax assessment for more than 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. See more
- State Income Tax Credit for Rehabilitated Historic Property – See more
* (Update)* Changes coming to the State Income Tax Credit program -- On May 12, 2015, Governor Deal signed into law HB 308. This law, which goes into effect January 1, 2016, includes changes to the existing state income tax credit program for rehabilitated historic property (O.C.G.A. 48-7-29.8) that creates two additional categories of projects, subject to an annual cap, and allows for the sale of earned credits.
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.
Georgia HPD has compiled a list of Frequently Asked Questions regarding HB 308, and changes to the Georgia State Tax Credit Program for Rehabilitated Historic Properties.
The National Trust Community Investment Corporation, a subsidiary of the non-profit National Trust for Historic Preservation, has information on various project financing options. There are also many for-profit limited liability companies (LLCs) that provide consulting services for developers, allowing them to monetize federal and state tax credits, thus creating project equity.
- The applications are a two or three part process, describing before and after rehabilitation. Ideally, project work should be submitted before work begins and be completed within two years.
- Applications for all three programs are sent to this office, and must be reviewed and approved by HPD, then afterward by the NPS for the RITC.
- There are substantial cost tests that must be met to qualify for each program.
- See individual fact sheets (linked above) for details for the federal or state tax incentives.
Frequently Asked Questions
- The Federal Historic Tax Credit: Transforming Communities (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
- Waynesborough Academy Senior Residences - February 2012