Federal Historic Tax Credit

The Federal Historic Tax Credit is a tax credit incentive program administered by the National Park Service (NPS) in partnership with the Internal Revenue Service (IRS) and with State Historic Preservation Offices (SHPOs). This is the oldest type of tax credit program available for the development of real estate transactions as it was created in 1976. Much like the LIHTC, the Federal Historic credit encourages private investment in real estate through the sale of tax incentives which are given to a project based on criteria set by NPS. This program is designed to help many types of real estate transactions and is not exclusive to residential real estate. There is a 5 year compliance period associated with the credit and is calculated at 20% of the eligible property basis. This program has assisted many well known projects including Fenway Park in Boston and many historic school buildings as they are remolded for different uses. This program comes with significant compliance regulations where non-compliance can lead to stiff penalties including recapture of tax credits. Prospective investors should consult experienced developers, accountants and property management firms when considering this program. To find out more about the application process and compliance regulations, and learn about other government programs for your deals, pick up a copy of Government Deal Funding for Real Estate Investors and Developers.