Find out about tax credits?

They are credits that are designed to encourage the rehabilitation and re-use of older buildings.  There are three kinds of tax credits available: a 20% State Income Tax Credit, a 20% Federal Income Tax Credit, and a 10% Federal Income Tax Credit.  These credits directly reduce the amount of income tax you owe.

Know if my building is eligible for a tax credit?

To be eligible for tax credits, the building must be considered historic.  Your building may already be designated as a “historic structure” by your town, the state, and/or the federal government.  Your local officials and the Colorado Historic Society can tell you if your building has been designated as such.  The Society can also help you if you need to designate your property as a “historic structure.”

The 10% Federal tax Credit differs in that it is only available to buildings that have officially been determined “non-historic.”  The Colorado Historical Society is generally responsible for making this determination.

There are also some requirements based on the use of the building.  State Tax Credits are available for all historic buildings.  The Federal Tax Credits are only available if the building is used for business (or rental) purposes.

Find out how credits are calculated?

The credit is a percentage (10%, 20%) of your qualified rehabilitation costs.  Qualified rehabilitation costs include most expenses related to the physical preservation of the property - new or repaired walls, floors, ceilings, windows, etc.  For more details, please refer to Preservation Tax Credits section of our web site.

Claim the credits?

There is an application process for each type of tax credit.  The application is reviewed and certified (approved) by the appropriate agency.  The 20% Federal Tax Credit is a 3-part application, reviewed by the Colorado Historical Society and the National Park Service.  The 20% State Tax Credit is a 2-part application, reviewed by either the Colorado Historical Society or a local preservation organization.  The 10% Federal Tax Credit is a 1-part application, reviewed by the Internal Revenue Service.

A more detailed explanation of the application process can be found at the Preservation Tax Credits section of our web site.  The applications are reviewed using The Secretary of the Interior’s Standards for Rehabilitation.  Your project does not have to be a museum-quality restoration.  Most tax credit projects are actually rehabilitations, in which an older building is rehabilitated and updated.  The Standards provide guidelines on how to update your property while protecting and enhancing the qualities which make it historic.

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