The federal Rehabilitation Tax Credit program for historic buildings has catalyzed the revitalization of downtowns and entire neighborhoods as well as the rehabilitation of individual landmarks. The program permits the owner of an income-producing historic building to seek an income-tax credit equal to 20% of the qualified rehabilitation expenditures. An income-producing property may encompass commercial space, office space, rental apartments, a bed and breakfast inn, etc., or a mixture of such uses. The building must be listed in the National Register of Historic Places, either individually or as a contributing property of a historic district. Further, the rehabilitation must meet the Secretary of the Interior's Standards for Rehabilitation.

With regard to the financial requirements of the program, the structure must be substantially rehabilitated, which means that the qualified expenditures must exceed the greater of $5,000 or the adjusted basis of the building (adjusted basis: cost of the property minus cost of the land, plus any capital improvements already made, minus any depreciation already taken). Generally, this expenditure test must be met within a 24-month period.

The program is administered at the state level by the Delaware State Historic Preservation Office (DE SHPO), which is happy to work with the property owner during the early stages of project planning. It is strongly recommended that the property owner contact the DE SHPO before any work begins, so as to avoid mistakes that may jeopardize the tax credit. For further information, please contact:

Tax Act Coordinator
Delaware State Historic Preservation Office
21 The Green
Dover, DE 19901
(302) 736-7400

Federal Historic Preservation Tax Incentives