Federal Tax Credits for Historic Properties

Federal tax incentives are available to stimulate private investment in the rehabilitation of historic structures. In Michigan, the State Historic Preservation Office administers provisions of the Tax Reform Act of 1986 in partnership with the National Park Service and Internal Revenue Service.

The Tax Reform Act of 1986 establishes:

a 20% tax credit for the substantial, certified rehabilitation of certified historic structures for commercial, industrial and rental residential purposes, and a 10% tax credit for the substantial rehabilitation for nonresidential purposes of buildings built before 1936; and
a straight-line depreciation period of 27.5 years for residential property and 39 years for nonresidential property for the depreciable basis of the rehabilitated building reduced by the amount of the tax credit.

A certified historic structure is any building that is listed individually in the National Register of Historic Places, or located in a registered historic distinct and certified as being of historic significance to the district.

A registered historic district is any district that is listed in the National Register of Historic Places, or designated under a local ordinance under Michigan Public Act 169 of 1970, as amended, which has been certified by the National Park Service as substantially meeting all the requirements for listing of districts in the National Register. Simply being listed in a locally designated historic district is not sufficient to gain access to the Federal tax credits.

A certified rehabilitation is any rehabilitation of a certified historic structure that is certified as being consistent with the historic character of the property and, where applicable, the district in which it is located. The Secretary of the Interior's Standards for Rehabilitation are used to determine whether the historical character of the building is preserved through the process of rehabilitation.

More information is included in the sites below.

Tax Incentives Home Page (National Park Service)
Before You Apply (National Park Service)
NPS Application Instruction and Form (National Park Service)
NPS Supplemental Information Guide
NPS Transmittal Checklist
Secretary of the Interior's Standards for Rehabilitation (National Park Service)
IRS Form 3468, Investment Credit (United States Department of the Treasury, Internal Revenue Service)