Historic Preservation Tax Incentives in Maine Gilman Street School, 2008 Waterville – c. 1950 2011
What are the tax incentives? State Historic Preservation Tax Federal Historic Preservation Tax Incentives: Incentives: A credit on taxes owed to the State of A credit on taxes owed to the IRS Maine The credit may be claimed for 20% of The credit may be claimed for 25% of qualified rehabilitation expenditures certified qualified rehabilitation (QREs) expenditures (CQREs) incurred The rehabilitation must meet the between January 1, 2008 and substantial rehab test , December 31, 2023 meaning the investment must be $100,000 in CQREs = $25,000 in State greater than or equal to the building’s credits adjusted basis These credits are fully refundable $100,000 in QREs = $20,000 in Federal and must be claimed over a 4- credit year period (25% per year for 4 Credit is not refundable and must be years, beginning when building is claimed in the year the building is placed in service) placed into service $5,000,000 per project cap No cap
%20 Federal Historic Rehab Credit If a project qualifies and for the Federal Tax %25 Maine Substantial Historic Rehab Credit Credit, it is = automatically %45 Tax Credit on Qualified Rehab Expenses qualified + for the %5 if also an Affordable Housing Project MAINE SUBSTANTIAL = REHAB CREDIT %50 Total Tax Credit on Qualified Rehab Expenses *these percentages do not account for syndication of credits North Berwick Woolen Mill Certified 2009
What expenses are eligible and what expenses are ineligible to receive credit for which the 20% tax credit can be claimed in a rehabilitation project? Some eligible items include: • Walls, Partitions, Floors, & Ceilings • Permanent coverings, such as paneling or tiles • Windows and doors • Components of central air conditioning or heating systems • Plumbing & plumbing fixtures • Chimneys, stairs, escalators, elevators, sprinkler systems, Mitchell Double fire escapes House, • Other components related to the Park Row, operation or maintenance of the Brunswick building Some ineligible items include: • Appliances, Cabinets, Carpeting (if tacked in place and not glued) • Decks (not part of original building) Photos by Sutherland Conservation & Consulting • Demolition costs (removal of a building on property site) • New construction costs or enlargement costs (increase in total volume) • Fencing, feasibility studies, financing fees, furniture, landscaping, leasing expenses • Outdoor lighting remote from building, Parking lot, Paving, Planters • Porches and porticos (not part of original building), Retaining walls, Sidewalks, Signage, Storm sewer construction costs, Window treatments
Basic eligibility requirements for State & Federal incentives 1. The building must be listed in the National Register of Historic Places. 2. The building must be used for an income-producing purpose for at least five years after completion of the certified rehabilitation. 3. The project must meet the IRS substantial rehabilitation test -OR- it must incur certified qualified rehabilitation expenditures of between $50,000 and $250,000. 4. The entire rehabilitation project Norway Opera House – certified 2013 must be done in accordance with either the Commission’s or the NPS’s interpretation of the Secretary of the Interior’s Standards for Rehabilitation .
State and Federal Certification Applications Part 1 – Evaluation of Significance Is it individually eligible for listing in the NR? Does it contribute to a NR listed or eligible historic district? Part 2 – Documentation of Existing Conditions and Description of Rehabilitation Work Chestnut Street Church, Portland Certified 2009 Is the proposed rehab work in accordance with the Secretary of the Interior’s Standards for Rehabilitation? Part 3 - Request for Certification of Completed Work Was the work completed in accordance with the approved Part 2 application and applicable conditions? Photos by Sutherland Conservation & Consulting
Administration of Federal Historic Preservation Tax Incentives Program (including the State Substantial Rehabilitation Credit) IRS Expenditure Certification & Recapture Parts 1-3 Application Final approval/denial/ conditions & final certification National Park Photos by Sutherland Service Lamb Block, Livermore Conservation & Consulting Falls Certified 2013 Consult with applicant & project team Review & Comment - Parts 1-3 of the HTC application Maine Historic Preservation Commission
Administration of Maine’s Small Project Rehabilitation Credit Maine Revenue Services Expenditure Certification & Recapture Shepherd Block, Rockport Certified 2011 Consult with applicant & project team Parts 1-3 Application final approval/denial/conditions & final certification Maine Historic Preservation Commission Photo by Lachman Architects & Planners
Effects of the State & Federal HTCs in Maine Since the passage of the revised State HTC in 2008 and as of March 1, 2016: 67 rehabilitation projects certified; 37 in progress; Investment of $236 million in certified rehab expenses; Investment of $63 million in related new construction expenses (ineligible for the HTCs); Largest project was app. $35 million; Smallest was app. $55 thousand; Projects have supported approximately 4500 jobs in construction industry Music Hall Block, Farmington Payson-Winslow Block, Portland
More Effects Certified projects include: 19 downtown commercial buildings; 13 historic apartments/residences; 13 former schools; 10 industrial buildings; Squire Perley Building, Hallowell Certified 2010 6 church, seminary & associated buildings; 5 historic hotels; 2 hospital/asylum buildings; 2 fire stations; 1 library; Photos by Sutherland 1 military barracks Conservation & Consulting
More Effects Projects have been certified in 31 towns in 12 of Maine’s 16 counties; 25 previously vacant buildings have been rehabilitated and returned to the tax rolls; Photo by Sutherland Conservation & Consulting Colonial Inn, Ogunquit – Certified 2013 Photo by Tremont Preservation Unity Village School - Certified 2015
Gerald Hotel – Fairfield c. 1900 Before Rehab - 2011 Photos by Sutherland Conservation & Consulting
Gerald Hotel – 2013 - After Rehab Photos by Sutherland Conservation & Consulting
449 Main Street - Rockland 2009 c.1935 2009 Photos by Sutherland Conservation & Consulting
2011 449 Main Street – Rockland – After Rehab Photos by Sutherland Conservation & Consulting
Photos by Sutherland Conservation & Consulting American Woolen Co. Mill Dover – Foxcroft
Photos by Sutherland Conservation & Consulting
General interior conditions in mill buildings and shipping building Photo by Further North Photography Photos by Sutherland Conservation & Consulting
Maine Historic Preservation Tax Incentives For more information regarding either the Federal or State rehabilitation tax credits contact: Mike Johnson Maine Historic Preservation Commission 207-287-2949 Mike.D.Johnson@maine.gov For more information regarding fiscal and tax aspects of the State credit contact: 449 Main St., Rockland Certified 2011 Richard Truman Maine Revenue Services 207-624-9547 Richard.E.Truman@maine.gov
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