The Federal Rehabilitation Tax Incentive Program
As of August 15, 2023
All federal historic preservation tax credit application must be submitted electronically.There are new forms, requirements for formatting documents, and the file naming conventions that must be followed. Before submitting a new application, or providing additional documentation for existing applications, please see the updated information below and review the National Park Services webpage.
About the Federal Rehabilitation Tax Incentive Program
The Federal Rehabilitation Tax Incentive 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 federal level by the US Department of the Interior through the National Park Service, and at the state level by the Delaware Division of Historical and Cultural Affairs (HCA) through the State Historic Preservation Office. It is strongly recommended that the property owner contact the HCA staff before any work begins so that they may receive assistance in meeting all program requirements during the early stages of project planning.
Submitting a Federal Tax Credit Application
All federal applications are submitted to HCA for review first. HCA then forwards applications to the National Park Service for review and approval.
To access the National Park Service’s revised application forms and instructions please go to https://www.nps.gov/subjects/taxincentives/historic-preservation-certification-application.htm. After completing the federal HPTC application forms and preparing photographs, photo keys, drawings of existing and proposed conditions in accordance with the new format requirements, please email all material to: HCA_HistoricTaxCredit@delaware.gov.
For further information regarding the federal tax credit program, including the IRS information governing the program and guidance on the Secretary of the Interior’s Standards, please go to Tax Incentives for Preserving Historic Properties.
To contact the HCA staff to discuss the federal tax incentive program, please contact:
Tax Credit Program Coordinator
Division of Historical and Cultural Affairs
(302) 736-7400
HCA_HistoricTaxCredit@delaware.gov