The Historic Rehabilitation Tax Credit

Historic Rehabilitation Tax Credit

Georgia has a rich history that’s been recorded and told in the form of century year old homes, churches, and other commercial buildings.  Preserving these structures has become a top priority for some investors and history enthusiasts.  If you or an investment group are rehabilitating homes and buildings in Georgia, then you should become very familiar with the Historic Rehabilitation Tax Credit.

Qualifications

On January 1, 2016, the Georgia Department of Revenue adopted the Historic Rehabilitation Tax Credit (Reg. Sec. 560-7-8-.56). Investors interested in restoring historic buildings such as residential, mixed use, and commercial or professional properties can use this credit to help offset the costs of the rehab. This tax credit is available to certified rehabilitation projects completed on or after January 1, 2017, regardless of when the rehabilitation was started. The allowed credit is 25% of the qualified rehabilitation budget, with an additional 5% if the historic home is located within a target area. This credit is claimed by filing Form IT-RHC with the completed final certification from the Department of Natural Resources (DNR) with the taxpayer’s Georgia income tax return.

In addition, a 25% credit of qualified expenses is allowed for certified rehabilitation of any other certified structure, other than a historic home. For this credit, the taxpayer has to have pre-approval from the DNR and must file a claim for the credit using Form IT-RHC-AP.  The taxpayer also has to complete the pre-certification from the DNR through the Georgia Tax Center. The regulation also specifies reporting requirements, credit limitations, and provides rules on the carry forward, recapture, sale and transfer-ability of the credits.