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State Income Tax Credit - UNDER CONSTRUCTION
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How much in tax credits can I get?
Your structure must be designated City or State Landmark or in a designated Landmark District. You will also have to fill out a Tax Credit Application, which you can find on the Web Site. There are also preliminary and final project site visits that are made by Preservation Staff that determine qualified project costs.
How does the historic preservation tax credit process work?
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Fill out an application and submit
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Staff visits the project site and determines what project costs are qualifying
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Landmark Preservation Commission approves the project
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Upon completion of project, staff visits the site and gains the Commission's approval (?)
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You will receive a tax credit certificate
Eligibility
Eligible Properties
• Over 50 years old, and
• Historically designated by:
State Register of Historic Places, or
Landmarked by a Certified Local Government (CLG)*
Eligible Taxpayers
• Property owner, or
• tenant with lease of 5 or more years
Eligible Projects
• Project must involve physical preservation, restoration or rehabilitation and must preserve the historic character of the property.
• Projects must meet certain historic preservation standards (the Secretary of Interior’s Standards for Rehabilitation).
• Rehabilitation costs must be over $5,000.
• Projects must be completed within 24 months.
• Projects are strongly encouraged to receive approval prior to beginning work to ensure that all work meets the Secretary of the Interior’s Standards for Rehabilitation.
EXTENT OF TAX SAVINGS
• Available credit is 20% of rehabilitation costs up to a $50,000 maximum credit per qualified property.
• Credit directly reduces (dollar for dollar) income taxes owed the state.
• Available credit can be carried forward 10 years.
• No limitation on amount of tax which can be taken in a tax year.
ALLOWABLE COSTS
• INCLUDES: “hard costs” associated with the physical preservation of a historic property—demolition, carpentry, sheetrock, plaster, painting, ceilings, doors and windows, fire sprinkler systems, roofing and flashing, exterior repair, cleaning, tuckpointing, cleanup, etc.
• DOES NOT INCLUDE:
1. Improvements undertaken due to normal wear and tear.
2. Routine or periodic maintenance (such as cleaning, routine painting, minor repairs, general periodic upkeep, redecorating or any purely cosmetic change that is not part of an overall rehabilitation or does not enhance the property’s historic character).
3. “Soft costs” such as: appraisals, architectural, engineering, and interior design fees; legal, accounting, and realtor fees, loan fees; sales and marketing; closing; building permit, use, and inspection fees; bids; insurance; project signs and phones; temporary power; bid bonds; copying; and rent loss during construction.
4. Acquisition costs.
5. New additions or enlargements (except as may be required to comply with building and safety codes).
6. Excavation, grading, paving, landscaping, or site work.
7. Repairs to additions made to a historic property after the property was officially designated.
PROCEDURES
- Find out if property is historically designated –from the Certified Local Government (CLG) or the Colorado Historical Society (CHS). If property is not designated, you should obtain designation before you apply for preliminary approval to proceed with a tax credit project. The designation process can take from 3 to 6 months. For projects commencing on or after June 3, 1999, work completed before obtaining preliminary approval may be eligible for the tax credit if the work meets the Secretary of the Interior’s Standards for Rehabilitation and other standards of the reviewing entity. Therefore, you should keep careful records and take before and after photographs, so that the reviewing entity can easily determine what work has been done that is eligible for the tax credit.
- Apply for preliminary approval by submitting the application form (Part 1), rehabilitation plans, photographs of the property and the $250 application fee (see below) to the appropriate reviewing entity (either CLG or CHS) unless the application fee has been waived by the reviewing entity for projects less than $15,000.
- Applicants are encouraged not to begin work until preliminary approval to proceed is granted. If work has already commenced, seek preliminary approval as soon as possible.
- Complete work with 24 months of the date preliminary approval was granted, or, if work commenced prior to preliminary approval, within 24 months of the date that work actually commenced.
- Within 60 days of completion of work, submit application for approval of completed work along with photographs and any additional fees (see below) to the appropriate reviewing entity (CLG or CHS).
- The CLG or CHS verifies that the completed work conforms to the approved plans, was completed within the appropriate period of time, and preserves and maintains the historic qualities of the property.
- CLG or CHS issues a “verification form” which is retained by taxpayer.
- Taxpayer submits verification form with tax return being filed for year in which the work is completed.
FEES
• $250 initial application fee
• no additional charge for projects costing less than $15,000
• $250 additional for projects costing from $15,000 to $50,000
• $500 additional for $50,000 to $100,000
• $750 additional for over $100,000
All fees are non-refundable
EFFECTIVE DATES • January 1, 1991 through December 31, 2009
The file below contains the information shown above about getting tax credits for preservation including eligibility, allowable costs and procedures.
Tax Credits-Eligible Projects.doc
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Application
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