Tax Credits
Our office administers both the State and Federal historic tax credit programs to help owners meet the costs of substantial restoration and rehabilitation projects. Our staff advises property owners in planning their projects and ensures that the work meets preservation standards.
Additionally, the Rebuild Rhode Island Tax Credit program administered by the Rhode Island Commerce Corporation can be used to rehabilitate historic buildings listed in the National Register of Historic Places.
FAQ's are available below. For more information, contact Virginia Hesse or Roberta Randall.
What is eligible?
These factors can help you decide whether your rehabilitation project meets the basic requirements for the 20% Historic Tax Credit. Eligible projects must be:
- A Certified Historic Structure: The building must be listed individually in the National Register of Historic Places or located in a registered historic district and certified as contributing to that district.
- Income-Producing Use: The property must be depreciable, meaning it is used in a trade or business or held for the production of income (e.g., commercial, office, rental housing).
- Substantial Rehabilitation: Rehabilitation expenses must exceed the greater of $5,000 or the adjusted basis of the building and its structural components.
- Certified Rehabilitation: The project must be approved by the National Park Service (NPS) as meeting the Secretary of the Interior's Standards for Rehabilitation.
The fee is 3% of Qualified Rehabilitation Expenditures. Payment is made to the R.I. Division of Taxation at the time the Tax Credit Contract is signed after RIHPHC has approved the proposed rehabilitation project.
Preservation: An Overlooked Economic Driver, A Study of the Impacts of Historic Preservation in Rhode Island (2018) analyzes historic preservation in Rhode Island in four areas: heritage tourism, the impact of the historic tax credit, life and culture, and sustainability.
The credit equals 25% of the cost of approved rehabilitation work for projects that rehabilitate space for a trade or business, and the credit equals 20% of the cost of approved rehabilitation work for residential apartments and condominiums.
The entire credit may be claimed when the project is completed. Unused portions of the credit may be taken over 10 years. Also, the owner does not have to use the credit themselves, but instead can sell the credit to another individual or to a corporation. Non-profit owners can qualify for the credit and assign or sell it to a tax-paying partner or investor.
Yes, if it is individually listed on the National Register of Historic Places or is listed within a National Register Historic District and contributes to the district's significance, or if it is part of a local historic district. To confirm if your property is eligible, first try the Historic Property Search; for assistance, email Joanna Doherty.
To qualify for the Historic Preservation Tax Credit, the property must be listed before the rehabilitation project is completed and the building is placed in service.
Owners of properties that staff considers to be eligible for listing may apply for preliminary certification of their properties. Preliminary certifications will become final when the building is listed on the National Register of Historic Places. Issuance of preliminary certification does not obligate the Commission to nominate the property. Applicants proceed with rehabilitation projects at their own risk; if the historic property is not listed prior to completion of the project, the preliminary certification will not become final. To inquire about National Register listing, contact Joanna Doherty.
Most historic buildings that are used to produce income will qualify, such as offices, stores, rental apartments, and factories; development of condominiums may also qualify. Private one- and two-family residences, social clubs, and tax-exempt properties like schools, hospitals, and churches do not qualify.
Owners must "substantially" rehabilitate their historic building. This means the cost of the project must be greater than the value of the building (not including the value of the land the building occupies). Rehabilitation expenses must exceed the greater of $5,000 or the adjusted basis of the building and its structural components.
Exterior and interior rehab qualify for the tax credit as long as the work meets the Secretary of the Interior's Standards for Rehabilitating Historic Properties. Eligible projects include work on the roof, exterior walls, windows, foundations, structure, heating, plumbing, electrical system, and interior improvements that are capitalized to the building.
New additions to the building, site work, landscaping, and costs of fixtures and furnishings are not eligible. For more information, see Causes for Denial.
For Federal HTC, contact Virginia Hesse or Roberta Randall to set up a Sharepoint folder for your application.
The State HTC application process begins with an application to the Rhode Island Division of Taxation (see the advisory and application). This enters your project into the tax credit queue, but does not guarantee an award. The Division of Taxation will notify applicants in writing when an allocation of tax credits has been reserved for their project, and within ninety (90) days, applicants must file the following with our office:
Applications must be filed before the project is completed.
When the project is completed, applicants must file Part 3/Certification of Completed Rehabilitation with the State Historic Preservation Office. Applicants also must file information with the Rhode Island Division of Taxation, including a cost certification for the completed project.
Submit a completed Part 1, Part 2, or Part 3 application to us at any time. Reviews take approximately four to eight weeks.
We encourage applicants to discuss their project with one of our staff architects before beginning work. This consultation will make sure that the project will qualify and ensure that good historic preservation practices are followed. Please contact Roberta Randall or Virginia Hesse.
The new historic tax credit legislation was enacted in 2013 (RI General Law 44-33.6), and new regulations were drafted. Visit the following links for the 2013 Legislation and the 2013 Regulation.