State Historic Tax Credit - Proposed Rule Changes

RenovateDSM — Thu, 15 May 2008 15:51:29 -0700

[UPDATE June 25, 2008 - The final rule changes did not include the initially proposed five year holding period requirement. Thank you to everyone who helped highlight the negative impact of the proposed rule change.]

CLICK HERE TO VIEW THE PROPOSED RULE CHANGES - Note: the final rule changes did not include the following passage. However, this is an indication of how we must all be conscious of legislation and administrative rules concerning historic rehabilitation.

One change in particular concerned me greatly:

New Rule: 48.10A(303,404A) Repayment of tax credit certificates.
48.10A(1) The owner must retain ownership of the project building for five full years after completion of the rehabilitation or pay back the credit. If the building owner disposes of the project building within one year after certification of the project and award of the tax credit, the owner shall repay 100% of the tax credit. For properties held between one and five years, the tax credit repayment amount is reduced by 20% per year.

In practical terms, this rule would prohibit developers from utilizing the Historic Tax Credits to renovate otherwise qualifying historic single family homes - no developer could afford to hold a building for five years.

RenovateDSM.com - State Historic Tax Credit - Proposed Rule Changes - Comments

State Historic Tax Credit - Proposed Rule Changes