Commercial Tax Credit Program Frequently Asked Questions
*** Commercial Tax Credit News *** Electronic Submissions Coming! As of August 15, 2023, all applications for the commercial tax credit program must be submitted electronically, both to the State Historic Preservation Offices and to the National Park Service. New forms and instructions will be available from the National Park Service on July 10, 2023. Both the NYSHPO and the NPS will be providing further instructions and guidance on exactly how this will work during July. Read more about electronic submission on the National Park Service's website.
What is the preservation credit?
It is a direct credit applied to the amount of federal and/or state income taxes owed. The amount of the credit is based on a percentage of the final cost of the rehabilitation work referred to as the Qualified Rehabilitation Expenditures (QREs).
Who qualifies for the commercial credit?
The credits are available to owners of historic income-producing buildings including commercial, office, industrial, and residential rentals. If you own and plan to rehabilitate a building that is listed in the National Register of Historic Places or in a locally certified district, you may qualify for the credits. Private, owner-occupied homes do not qualify for the commercial credit, but may be eligible for the Historic Homeownership Rehabilitation Credit.
How are the federal and state tax credit programs different?
The federal program offers a 20% credit based on the Qualified Rehabilitation Expenditures (QREs), and there is no cap to the amount of credit that can be claimed. The state program is limited to properties that are approved for the federal program and located in qualifying census tracts. It offers a 20% or 30% credit but is capped at $5 million based on the QREs. To qualify for the 30% credit, buildings must be placed in service after January 1, 2022, and have final QREs of no more than $2.5 million.
What kind of work qualifies?
All interior and exterior rehabilitation work is eligible for the tax credits, as long as it follows the Secretary of the Interior's Standards for Rehabilitation
. This includes work that adapts the property for
contemporary use or improves its energy efficiency. The programs essentially cover the entire historic building, from foundation to roof, inside and out.
How is the credit approved?
The rehabilitation work must be approved by the State Historic Preservation Office (SHPO) and the National Park Service. The SHPO is your primary contact, reviewing your application materials throughout project planning and construction, providing technical assistance and advice, requesting information as needed, and submitting your application materials to the National Park Service for review and approval.
What are the benefits?
The most direct benefit is the 20% or 30% tax credit. This program has also been recognized as an important economic catalyst: it provides jobs, encourages investment, and keeps buildings on the tax rolls. Also, the preservation credit may be used in conjunction with state and federal rehabilitation grants for housing or façade work.
How Do I Apply?
There is a three-part application process that uses forms provided by the National Park Service. Forms are submitted to the SHPO for review,
then forwarded to the NPS. There is no separate application for the state commercial credit, eligible applicants that receive NPS approval are automatically approved for the state credit as long as they have paid the state review
fees and comply with the state media agreement. To get more information about the review process, please contact our office or go to our Territorial Map section to find information for the technical program
representative for your county.
How can I find out if a property is listed in the NYS & National Registers of Historic Places, and/or located in a qualifying census tract?
Visit parks.ny.gov/shpo/online-tools/ for access to the division's Cultural Resource Information System (CRIS) or call 518-268-2213 for State and National Registers program assistance.
What if my property is not listed in the Registers?
The division can help you determine if your property is eligible for State and National Registers listing and, if so, provide assistance on the nomination process. Although listing is a program requirement, the property does not have to be listed before you begin the project.
Can the tax credits be used in combination with other public funding programs?
Yes. A variety of federal and state incentive programs can be used in conjunction with the preservation tax credits, such as community development grants and low-income housing credits.
Property Tax Abatements
The Real Property Tax Exemptions for Historic Properties gives authority to local communities to offer a five-year freeze on increases in assessment that commonly result after an owner has rehabilitated a property. After five years, the increased taxes will be phased in over the next five years, resulting in a ten-year delay before the full impact of the new assessment is felt. Rehabilitation work must be performed on properties designated as local landmarks or located in local historic districts, and work must be approved by the landmarks commission. Contact your municipal tax assessment office to see if you qualify for tax abatements.