Historic home renovations can offer a home owner incentives and tax credits that provide unique benefits when investing in historic propery. There are two different things here: a tax credit (reduction in property tax) when your home registered as a historic property and the second is tax credit for money spent on renovating a historic property.
I recently attended a neighborhood meeting within my community, Historic Oakwood, where these two things were discussed and neighbors generously shared their insight and experiences. If you are confused; no worries. At the end of the meeting, the one consensus is this is a complex, complicated subject. However, most of the neighbors who went through it said that it is not a difficult process, just a lot of detail work.
The renovation tax credit is given in increments of 25,000 improvements to historic property. Owners may apply for this credit multiple times. The improvements must protect the historic integrity of the home. It is also important to know that you will need to provide before and after photos and architectural drawings. Projects that change the historic features will be denied. For example, they prefer damaged clapboards be replaced versus residing an entire facade. If you are hoping to remove the wall between the kitchen and dining room, forget about it. In order to get this tax credit, you will need to restore original features and floor plans. The review board is looking for whether a feature or improvement is “contributing” to the historic integrity when they approve or deny a project for the renovation tax credit.
The take away is to do your homework. Review all paperwork in advance and ask questions before beginning construction if you plan to take advantage of this tax credit.
