State Historic Preservation Income Tax Credits

Houses in Lincoln Park neighborhood

Colorado offers a state income tax credit to property owners for preservation and rehabilitation work on designated historic properties. For commercial (income producing) projects, visit the Colorado Office of Economic Development and International Trade website for information and application details. 

For residential (non-income producing) projects, Landmark Preservation reviews and certifies state income tax credit applications. Owners are advised to get appropriate tax advice to ensure that all requirements are met.

The tax credit for residential, non-income producing projects is 20%* of the qualified rehabilitation costs up to a maximum $50,000 credit per qualified property over a ten-year period. 

*In March 2020, the state issued a disaster declaration for Denver County, which increases the tax credit to 25% for rehabilitation projects undertaken between March 10, 2020 and March 13, 2026. 

Additional Information

Eligibility Requirements

  1. Properties must be at least 50 years old and:
    • Listed on the National Register of Historic Places or a contributing property in a historic district listed on the National Register.
    • Listed on the Colorado Register of Historic Properties or a contributing property in a historic district listed on the Colorado Register.
    • Designated by the City and County of Denver as an individual landmark, or a contributing property in a Denver historic district. (See landmark map to determine the status of your property. If you are unsure if your property is a contributing property in a historic district, contact Landmark Preservation.)
  2. You must be the owner-occupants of the property, owners that do not earn income from the property, or tenants with leases of five or more years.

  3.  Projects must involve physical preservation, restoration, or rehabilitation of historic buildings. A project can include multiple work items.

  4. Eligible work can only include what is listed in the below "Qualified Expenses" dropdown. If the type of work is not listed there, it is not eligible for tax credits. However, all work undertaken during the project must be listed in the application, whether it is eligible for tax credits or not. Landmark Preservation staff can also help you determine if work items are eligible.

  5. Projects must preserve the historic character of the property and the entire project, including non-eligible work, must meet the Secretary of the Interior's Standards for Rehabilitation. Landmark Preservation and the Denver Landmark Preservation Commission will review your application to ensure that these standards are met.

  6. Rehabilitation costs must be over $5,000. You may reach the $5,000 minimum through one work item or multiple work items.

  7. If the project is a Denver landmark or located in a locally designated historic district, all exterior work that requires a building or zoning permit must receive a Certificate of Appropriateness. View the Design Review webpage to learn how to get your Certificate of Appropriateness.

  8. We highly encourage you to apply before you begin working on your property. While the tax credit rules allow applicants to submit a tax credit application within 24 months from the start of the project, submitting an application does not guarantee approval of the tax credit. By submitting an application after work has begun, you run the risk of being denied if program requirements are not met.

Qualified Expenses

The following work items qualify for the residential tax credit. If an item is not on this list, it does not qualify for the tax credit. For a project to be eligible for a tax credit, all work including interior and exterior work, qualified and non-qualified expenses must conform to the Secretary of the Interior’s Standards for Rehabilitation as determined by the Landmark Preservation Commission and its staff.

Qualified Exterior Work Qualified Interior Work
Masonry - repair, repointing or replacement (as required*) Interior historic walls and finishes, wood work and trim - repairs and replacement (as required*)
Siding, woodwork and trim - repair or replacement (as required*) Historic floor materials (except carpet) - repairs, refinishing and replacement (as required*)
Foundation repairs or replacement - including associated excavation work Reconstruction of missing interior historic elements - when sufficiently documented
Roofs - repair or replacement (as required*) Electrical, plumbing, heating, ventilation & air conditioning - repairs and upgrades
Windows and doors - repair or replacement (as required*) Insulation
Construction work directly associated with the above work items

*Replacement of historic features may be a qualified expense if it is clearly demonstrated that the features are in irreparable condition. Replacement elements must match the historic features in size, shape, configuration, material and appearance.

Expenses that do not qualify for the tax credit include, but are not limited to: rehabilitation of additions or accessory structures that were constructed outside the period of significance for the property or historic district; expenses for remodeling bathrooms or kitchens except for rehabilitation of historic features; changes to historic interior floor plans; finishing of basements; fixtures and appliances; landscaping, fences, retaining walls or other site work; site excavation (including basements), grading and paving; replacement of sewer lines; permit and inspection fees; acquisition costs; architecture, engineering or design fees; “soft costs” such as appraisals, legal fees, accounting, realtor fees, and insurance.

Completing Your Project

There is no deadline to complete your project, but the Part 2 application must be submitted within 120 days of completion of the project.

FAQs for Residential (Non-Income Producing) Tax Credits

Application FAQs

  • How do I apply? 

If you own an income-producing property, you will need to apply for a commercial tax credit through Colorado’s Office of Economic Development and International Trade. If you own a non-income-producing, owner-occupied property in Denver, you will apply through Denver Landmark Preservation. Learn more about application requirements.

  • Are there fees for review? 

Yes. The amount of the fee depends on the total estimated project costs, which may be higher than the qualifying costs associated with the project. If the total estimated project cost is:

  • $15,000 or less: the fee is $250 
  • $15,001 to $50,000: the fee is $500
  • $50,001 to $100,000: the fee is $750
  • Over $100,000: the fee is $1000.

The fee is assessed when the Part 1 application is submitted. However, Landmark Preservation staff will review your Part 1 application before charging you the fee. Staff will let you know if they do not believe your project qualifies for the tax credit, and you will not be charged for the preliminary review. However, you may request that staff forward your application to the Landmark Preservation Commission for a final determination of whether the tax credit application can be certified. Tax credits that are forwarded to the Landmark Preservation Commission for their certification will be charged a fee regardless of whether staff recommends approval or denial. Fees may be paid by credit card online or over the phone once staff has reviewed your application.  Payment may also be made by check mailed to Denver Landmark Preservation. Checks must be made out to the Manager of Finance and must include the application address in the subject line. 

  • How long does the review process take?

Tax credit applications are made in two parts. Landmark staff review each part of the tax credit application to assess whether it meets the program’s eligibility requirements. For each part of the application, this review may take up to 90 days, and the applicant has up to an additional 90 days to submit revised materials, if requested by staff. Once staff has found the application to meet the tax credit eligibility requirements, each part of the application will be placed on the Landmark Preservation Commission’s agenda, which may add approximately four to six weeks to the timeline.

  • What do I need to submit? 

The application is made in two parts. The Part 1 application shows the existing conditions prior to rehabilitation, describes the proposed scope of work for the entire project (including qualifying and non-qualifying work) and provides cost estimates for the proposed work. If your project includes work that qualifies for the tax credit as well as non-qualifying work, you must submit a detailed budget that clearly identifies qualifying and non-qualifying expenses. Photographs of the areas of work, both interior and exterior, showing the condition prior to rehabilitation must be included with the Part 1 application. If any interior demolition is planned as part of your project, complete floor plans showing existing conditions and proposed conditions must be submitted with all proposed interior demolition clearly indicated. If any of the proposed work requires Landmark design review, Landmark must issue a Certificate of Appropriateness and stamped approved drawings before the Part 1 application may be certified by the Landmark Preservation Commission. (Note: Landmark issuance of a Certificate of Appropriateness does not guarantee approval of tax credits. Tax credits are reviewed based on the Secretary of the Interior’s Standards for Rehabilitation, the tax credit statutes and rules and regulations. Landmark design review is reviewed based on the Design Guidelines for Denver Landmark Structures and Districts.)

The Part 2 application shows the completed work and a final budget with corresponding, itemized invoices for the completed work.  Photographs must also be included with the Part 2 application that show all areas of completed work.  Ideally, the Part 2 photos should replicate those submitted with the Part 1 application as closely as possible to clearly show before and after conditions.

  • Are there timelines for submittal of the Part 1 or Part 2 applications?

Yes. We strongly encourage applicants to submit their Part 1 application before they begin work. However, the Part 1 application may be submitted after the project has already started if the Part 1 application is submitted within 24 months of the start of the project. (See the bullet below about the risks of submitting a Part 1 application while the work is underway.) There is no timeframe for completion of a project, but the Part 2 application must be submitted within 120 days of completion of the project. These timelines are inflexible and are outlined in the tax credit rules and regulations (PDF).

  • When is a project deemed complete?

A project is considered complete after the applicant makes final payment on the contractor’s invoices, or when final inspection is approved by Community Planning and Development if a building or zoning permit and subsequent inspection is required.

  • Can I submit an application while the project is under construction or after I complete the work?

Yes, but you do so with a substantial risk that the project is ineligible for tax credits or the tax credit application is incomplete and cannot be approved. Landmark staff have found that many Part 1 applications submitted after the completion of the project often lack comprehensive photographs of the existing condition prior to the start of the project, which disqualifies the application.  We have also found that the completed work shown in the Part 2 applications does not always meet the Secretary of the Interior’s Standards for Rehabilitation, which also disqualifies the application. In addition, all work on the property undertaken at the same time must be included the tax credit application, including qualifying work and non-qualifying work. All work must meet the Secretary of the Interior’s Standards for Rehabilitation regardless of whether it is qualifying for tax credits or not. Finally, there are strict timelines outlined in the state’s rules and regulations (PDF) governing the tax credit program, as mentioned above. The Part 1 application may not be submitted more than 24 months after the start of the rehabilitation project, and the Part 2 application may not be submitted more than 120 days after the completion of the project. Due to the complexities of tax credit applications, we strongly encourage applications to submit their Part 1 application prior to beginning any work.

  • Is there a minimum amount of work I must do to qualify for the tax credit?

Yes, you must propose and complete at least $5000 of qualified rehabilitation expenses on your property to qualify for the tax credit.


Eligibility FAQs

  • Which properties are eligible for tax credits?

An individual landmark structure or contributing building to a Denver historic district may be eligible for preservation tax credits, though non-contributing buildings and non-contributing features of contributing buildings are not eligible. For example, an addition may be considered a non-contributing feature, so work on that addition may not be eligible for tax credits. In addition, individual buildings listed on the National Register of Historic Places and the Colorado Register of Historic Properties and contributing buildings to historic districts listed on the National Register or Colorado Register may be eligible for tax credits. If you have questions about whether your property would qualify, please email landmark@denvergov.org.

  • What is the basis for review of tax credit applications?

Tax credit applications are reviewed using the Secretary of the Interior’s Standards for Rehabilitation. The program’s statute and rules and regulations (PDF) are also the basis for reviews. All work undertaken on the exterior and interior of the building during the tax credit application process is subject to review during the tax credit application process. Note: while tax credit review is not based on the Design Guidelines for Denver Landmark Structures and Districts, however, any work requiring Landmark design review is also reviewed based on the design guidelines. However, if the project meets the design guidelines, that does not guarantee that it will meet the Secretary of the Interior’s Standards or that the work is a qualified expense for the tax credit.

  • Which should I apply for, the residential tax credit or the commercial tax credit?

If you own an income-producing property, including a rental property, you may be eligible for a commercial tax credit through Colorado’s Office of Economic Development and International Trade. If you own and occupy a non-income-producing property, you may be eligible for a residential tax credit.  In Denver, the residential tax credit program is managed by Denver Landmark Preservation.

  • May I apply for a tax credit if the property is my secondary residence?

Yes, you may apply for a residential tax credit on your secondary residence if you do not earn income from the property.

  • I purchased a property to flip/rehab and sell. Can I apply for the residential tax credit?

No, although you are not earning income during the rehabilitation of the property, the state statute requires the building to be owner-occupied by the person doing the rehabilitation work at the time the application is submitted.

  • I purchased a property that was recently rehabilitated and I am not planning to do any additional work for some time. Can I apply for a tax credit for the work that was done by the previous owner?

No, you may only apply for a tax credit if you commissioned the rehabilitation work yourself.  However, if you decide to do work in the future, the work may qualify for a tax credit.

  • I rent my residence as a short-term rental. Can I apply for the residential tax credit?

If you are a full-time resident of that property and you rent the entire home on a limited basis, you may qualify for the residential tax credit.  Similarly, if you are a full-time resident of that property and you rent a room within the residence, you may qualify for the residential tax credit. However, if you are renting your primary or secondary residence as a short-term rental and you do not live at the property full time, you may not apply for the residential tax credit.  In that case, you may be eligible for commercial tax credits.

  • Can I rent out my house before I submit an application?

Eligibility is determined at the time the application is submitted, not at the time the rehabilitation work was performed. A property that is rented (income-producing) at the time of application would be considered a commercial structure, so you would not be eligible for a residential tax credit even if it was owner-occupied and non-income-producing when the rehabilitation work was initiated.

  • Can I sell my house before I submit an application?

Eligibility is determined at the time the application is submitted, not at the time the rehabilitation work was performed. The applicant must own and reside at the property at the time of the application.

  • Can owners of condo units apply for the tax credit?

Condo projects are extremely complicated, and eligibility depends on the condominium’s governing documents. If the documents state that each condo unit owner owns a portion of the interior and exterior common elements, and the proposed rehabilitation work is for those common elements, condo unit owners may apply for the tax credit. In that case, owners of non-income-producing units would apply for the residential tax credit, whereas owners of income-producing units would apply for the commercial tax credit. However, if the condominium documents state that the condo board or Homeowners Association is responsible for maintenance of the interior and exterior common elements, the individual condo unit owners would not be eligible for the tax credit. The condo board or HOA could apply, but they are typically tax-exempt entities. It is best for condo boards or condo owners to consult with a tax attorney about whether they would be eligible for a tax credit.

If the proposed work is only within the owner’s condo unit, they could apply for the residential tax credit if the unit is not income-producing, or the commercial tax credit if the unit is income producing.

  • Can tenants or renters apply for the tax credit?

Yes, but you must have a current lease that is valid for five years or longer.  (Tenants with five or more consecutive one-year or two-year leases are not eligible for the tax credit.)  If you have a lease of five+ years duration, you can apply for the tax credit at any point within the lease period, but you will need to provide a copy of the lease as proof of the lease’s duration.

  • What happens if I apply after the work is completed? Can anything disqualify my application?

If any of the completed work does not meet the Secretary of the Interior’s Standards for Rehabilitation, including work that is not considered a qualifying expenditure, the entire project would be ineligible. There are also strict timelines outlined in the program’s rules and regulations (PDF). The Part 1 application may not include any work that began more than 24 months from the date the Part 1 was submitted. The Part 2 application must be submitted within 120 days of the completion of the project. Applications that lack complete documentation of conditions prior to work beginning will also be disqualified.

  • Can I omit work that does not meet the standards to claim a credit on the rest of the work that does?

No, all work performed during a single phase of construction must be included in a tax credit application and must meet the Secretary of the Interior’s Standards for Rehabilitation. Your Part 2 application for the tax credit must be approved and certified before you begin another construction phase that does not comply with the Secretary of the Interior’s Standards. If you have questions about construction phases and eligibility, please contact Landmark Preservation staff at landmark@denvergov.org.

  • Can I split my work into two projects; one for rehabilitation work for which I’ll claim the credit, and another for an addition (or accessory structure) for which I will not claim a credit?

A project may be split into phases, but all work performed during a single phase of construction must be included in a tax credit application and must meet the Secretary of the Interior’s Standards for Rehabilitation for the project to qualify for tax credits.  Your Part 2 application must be approved and certified before you begin another phase that does not comply with the Secretary of the Interior’s Standards. However, constructing an addition may not disqualify you from receiving a preservation tax credit as long as the addition meets the Secretary of the Interior’s Standards. If you have questions about whether your project may meet the Standards, please contact Landmark Preservation staff at landmark@denvergov.org.


Qualified Costs FAQs

  • What are the qualified costs?

The qualified costs are outlined in the state statute and the rules and regulations for the program.

Qualified costs on the exterior of a property include: 

  • Roof replacement or repair
  • Exterior siding replacement or repair
  • Masonry repair, repointing, or replacement
  • Window repair or replacement
  • Door repair or replacement
  • Woodwork and trim repair or replacement
  • Foundation repair or replacement Excavation costs associated with foundation work.

Qualified costs on the interior of a property include:

  • Electrical repairs and upgrades
  • Plumbing repairs and upgrades
  • Heating, venting, and air conditioning repairs and upgrades
  • Repair of existing interior walls, ceilings, and finishes
  • Repair or replacement of existing woodwork and trim
  • Insulation
  • Refinishing or replacing historic floor materials in-kind, excluding carpeting
  • Reconstruction of missing historic elements where there is sufficient historical documentation to guide the reconstruction.

While material replacement is listed for many of the qualified costs, the applicant must clearly demonstrate in the application that the existing material is so severely deteriorated that it cannot be repaired and requires replacement.

  • Do you review the interior of my property, or just the exterior?

Tax credit applications must include all work to be done during that phase of work, including interior and exterior work.  Not all work may be considered an eligible expense, but it all must meet the Secretary of the Interior’s Standards for Rehabilitation for the project to qualify for a tax credit.

  • Can I include expenses associated with the following project scopes?
  • Alterations to an addition
    • Rehabilitation to an addition that is a contributing feature of the historic building may be included in qualified expenses. If the addition is not considered a contributing feature of the historic building, expenses to rehabilitate it would not be eligible for the tax credit. However, all work associated with rehabilitating the addition must meet the Secretary of the Interior’s Standards for Rehabilitation
  • Design, architectural or engineering fees
    • Design, architectural, and engineering fees are not qualified expenses, nor are other “soft costs” such as appraisal fees, realtor fees, acquisition fees, legal fees, accounting fees, and insurance costs.
  • Excavation work
    • Excavation work may be included but only if it is associated with foundation repair or replacement work. Excavation costs may not be included for digging out a basement to create habitable space, or for excavation for an addition or accessory structure.
  • Finishing a basement or attic
    • Adding habitable space to an unfinished basement or attic is similar to an addition and is not a qualified expense.  However, if the work that you are doing is associated with a qualified cost, it may qualify for tax credits. For example, if you are doing mechanical work to condition the basement or attic for storage, the mechanical work may qualify for tax credits. Or if you are repairing foundation walls while the basement is being finished, the foundation repairs may qualify for the tax credit. Conversely, installing an egress window for a new basement bedroom would not qualify for tax credits.
  • Hazardous material mitigation
    • Stand-along mitigation of hazardous materials does not qualify for tax credits on its own. However, if removal of hazardous materials is associated with qualified work on the historic building, it may qualify for tax credits.
  • Interior renovations
    • Costs associated with rehabilitation work on the interior may qualify (see list of qualified expenses, above). However, general expenses associated with kitchen and bathroom renovations are not qualified expenses though electrical, plumbing, and mechanical upgrades are qualified expenses. For example, a bathroom renovation that includes a new sink, new light fixtures, and new tiling would not count as qualified expenses, but upgrades to the plumbing pipes and electrical wiring would count as qualified expenses. Alterations to historic interior public spaces (living room, dining room, etc.) and circulation (stairs, hallways), may disqualify the entire project from eligibility.
  • Landscaping
    • No. Site work, including landscaping, hardscaping, retaining walls, and fences, are not qualified expenses.
  • Painting
    • Painting associated with the repair of a historic material or feature may be a qualified expense but repainting of the exterior or interior of a building on its own is not a qualified expense.
  • Permit fees
    • Permit fees and inspection fees are not qualified expenses. 
  • Plaster removal as part of pipe or electrical replacement work
    • If you need to remove plaster to undertake plumbing or electrical work, the minimum amount of plaster should be removed to achieve the project. Repair of those plaster walls with plaster, or plaster-board and skim coating may be an eligible expense if plaster removal is limited.  Wholesale removal of historic plaster – even if non-decorative flat plaster – would likely disqualify the project from being eligible for tax credits.
  • Sewer line replacement
    • Replacement of sewer lines and associated excavation work is not a qualified expense. 
  • Replacement materials: if I am replacing severely damaged materials, do I need to replace with the same material, or may I use alternative materials?
    • In general, replacement elements must match the material, dimensions, and appearance of the historic features that they replace.  Severely deteriorated wood windows, however, may be replaced with wood or aluminum-clad wood as long as the replacement windows match the original in size, profile, operation, and configuration. If you are considering other alternative materials, please review the Secretary of the Interior’s Standards for Rehabilitation for guidance.
  • Work on a secondary structure, such as a garage
    • Qualified expenses may be included for work on a garage or other secondary structure if it has been determined to be contributing to the historic district or individual landmark structure. 

Help!

I have questions about this process. Who can I reach out to for help?

If you have any questions about the application, eligibility requirements, and what may or may not qualify for tax credits, please contact Denver Landmark Preservation staff at landmark@denvergov.org.


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