Protecting Heritage: Incentives
Is your property already on the state or national register of historic places?
Owners of National Register properties may be eligible for special historic preservation tax incentives. The Federal Investment Tax Credit Program authorizes a 20% investment tax credit coupled with accelerated depreciation for income-producing properties.
Dykeman Roebuck Archaeology LLC can partner with you and help you through this process.
Call 505 330 1825.
The Historic Preservation Division through its state and federal partners offers financial incentives to survey, record and preserve historic and prehistoric resources throughout the state. Tax credits, historic preservation loans, Certified Local Government Funds and small grants programs are available to individuals, groups and communities.
Rehabilitation of historic structures and sites may qualify to participate in programs that credit a percentage of project costs against state and/or federal taxes. Using local lending institutions as a conduit, the Historic Preservation Revolving Loan fund lends money to approved preservation projects below the prime rate. Certified Local Governments receive funds to help community preservation efforts, such as establishing ordinances or initiating surveys. Individuals and organizations have received funds to assist in a variety of projects, a survey of archaeological site to research for a publication to the creation of an exhibition.See Tax Credits, Loans and Grants, New Mexico Historic Preservation Division
Cultural Properties Preservation Easement Act, 1995 provides for donation, holding, and assignment of cultural properties preservation easements. this law allows a private landowner to give the historic aspect of real estate or other property to a non-profit organization to hold and maintain, while still keeping the right to use the other aspects of the property, including the right of sale. In some cases, the Internal Revenue Service sees this giving of the historic aspects of property as a charitable donation, which gains the landowner/honor a federal tax deduction.
Federal and state tax laws provide tax incentives for historic preservation projects which follow the Secretary of the Interior's Standards for Rehabilitation. The federal government offers a 20% investment tax credit for the approved rehabilitation of certified historic buildings used for income-producing purposes as well as a 10% credit for certain other older buildings. The state offers a similar 20% state income tax credit based on $5,000 or more of approved preservation work on designated properties. Applicants are urged to contact Office of Archaeology and Historic Preservation (OAHP) staff as early as possible when considering an application for either federal or state tax credits. There is a $50,000 maximum credit per qualified property. OAHP provides advice to property owners, developers, and architects concerning appropriate preservation and rehabilitation measures. OAHP staff review applications for tax incentives and make recommendations for approval.
Contact: Joseph Saldibar 303.866.3741
- Federal Tax Credit Program: owners of "income-producing" historic buildings (i.e. commercial or residential rental) can save 20% of their rehabilitation costs through a federal income tax credit.
- State Tax Credit Program: owners of residential historic buildings can save 20% of their rehabilitation costs through a state income tax credit.
Architectural/Technical Assistance to Historic Building Owners
- Computerized library of technical, "how-to" information on building rehabilitation.
- Staff architects provide information and training to federal and state agencies, local governments, and National Register property owners seeking rehabilitation tax credits.
Frequently Asked Questions
If you need further assistance please contact one of our staff: Staff Roster
- Ten percent of the Historic Preservation Fund Grant allocated annually to the states by Congress is passed through to Certified Local Governments for matching grant-in-aid projects. Grants are awarded through a competitive process administered through the State Historic Preservation Office for activities such as: survey, inventory, stabilization, documentation, National Register nomination, rehabilitation, and planning. Depending on the availability of federal funds allocated, survey and planning grants may also be available. Funding for the Historic Preservation Fund Grant Program does not come from tax payer's money but from fees for off-shore mineral leases.
- An initiative passed by Arizona voters in 1990 established the Arizona Heritage Fund with profits from the Arizona Lottery. Of the approximately 1.7 million dollars of Heritage Fund money allocated for historic preservation, 1.3 to 1.5 million dollars is awarded in an annual competitive matching grant program to private non-profit organizations, Indian tribes, and state and local governments for historic preservation projects. The remaining funds are used for special initiative projects such as the development of Historic Context Studies, rural inventories, nomination of properties to the Arizona Register of Historic Properties, emergency projects, state wide education projects, and assistance to the Arizona Site Stewards.
Tax Incentive Programs:
- The State Historic Property Tax Reclassification Program is designed to aid residential and commercial who seek to maintain and/or rehabilitate National Register-certified properties. The non-income producing portion of the program offered a reclassification of property effectively reducing up to fifty percent the tax assessment for owners of buildings listed on the National Register of Historic Places. The owner of the property enters into a 15 year agreement with the state under which the property must be maintained according to the Secretary of Interior's Standards for Rehabilitation and must be used for non-income producing purposes. The non-income producing component aids property owners who are rehabilitating commercial properties by freezing their tax base for ten years. This allows property owners to make improvements that will increase the usage and value of the building without significant property tax increases. Again the owner must maintain the property according to the Secretary of Interior's Standards.
- The Federal Investment Tax Credit Program authorizes a twenty percent investment tax credit for substantial rehabilitation of commercial historic properties listed on the National Register of Historic Places. The rehabilitation plans and specifications are reviewed and approved by the State Historic Preservation Office and then are forwarded to the National Park Service for final certification.
The SHPO is responsible for reviewing the eligibility of properties as well as rehabilitation plans to ensure their compliance with the Secretary of the Interior's Standards for Rehabilitation. Additionally, the State of Arizona maintains a property tax reduction program for non-income-producing properties listed on the National Register and a property tax incentive program for income-producing properties. This program is administered by the SHPO in conjunction with the county assessors. For information on the federal investment tax program, call Robert Frankeberger at (602)542-6943. For information on the state property tax program, call Erika Finbraaten at (602)542-6998.State Historic Property Tax Reclassification (SPT) for Owner-Occupied Homes
Tax Reform Act of 1976 (PL 94-455;90 Stat. 1525; 26 USC 1)
Sec. 48(g) and 170(h) Internal Revenue Code of 1986 (94 Stat. 3204; 26 USC 170(h))
Section 48(g) establishes which certified historic structures can qualify for preservation tax incentives. To qualify for the tax incentives, a property owner must have certification of both the historic structure and the completed rehabilitation.
Section 170(h)spells out the conditions under which charitable contributions of interests in historic property can qualify for income and estate tax deductions. In general, such donations are said to be "charitable contributions" only for conservation purposes.
Public Buildings Cooperative Use Act (PL 94-541; 40 USC 601a)