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Certified Rehabilitation Tax Credits

GA State Income Tax Credit Year End Report 2014

State and federal government tax incentives are available for owners of a historic property who carry out a substantial rehabilitation. All properties must be listed in, or eligible for, the National/Georgia Register of Historic Places, either individually or as part of a National /Georgia Register Historic District. Project work must meet the Secretary of the Interior’s/Department of Natural Resources Standards for Rehabilitation.

GA Rehabilitation Tax Incentives Projects Review Process

Rehabilitation Tax Incentives Projects Problematic Issues

Federal Rehabilitation Investment Tax Credit (RITC) – A federal income tax credit equal to 20% of rehabilitation expenses. Available ONLY for income-producing properties. The application is first reviewed by the Historic Preservation Division (HPD), then forwarded to the National Park Service for final decision. Program is available nationwide.

In Georgia:

State Preferential Property Tax Assessment for Rehabilitated Historic Property – Freezes the county property tax assessment for over 8 years. Available for personal residences as well as income-producing properties. Owner must increase the fair market value of the building by 50 – 100%, depending on its new use.

State Income Tax Credit for Rehabilitated Historic Property – A state income tax credit of 25% of rehabilitation expenses. The credit is capped at $100,000 for personal residences and $300,000 for income-producing properties. This program’s percentages and caps are effective for projects completed after January 1, 2009.

In South Carolina:

n June 2013, South Carolina Governor Nikki Haley signed into law the Abandoned Buildings Revitalization Act (ABRA). The ABRA is the latest tax incentive package that is aimed at helping South Carolina revitalize our existing commercial real estate. Under the new law, developers will receive a state tax credit equal to 25% of the cost to rehabilitate a previously abandoned building.

The basics of the credit:

  • A qualifying building is any commercial building that has had at least 66% vacancy for the past 5 years. Any building that was most recently used as a single-family residence will not qualify. By using a 66% vacancy rate, the legislators have allowed the credit to apply to the many buildings where only the first of three floors is currently occupied.
  • The credit is applicable for costs incurred between January 1, 2013 and December 31, 2019.
  • The applicable credit amount is determined as 25% of the total rehabilitation cost, with a credit not to exceed $500,000 per property. The costs of rehabilitation do not include the cost to acquire the building or the cost of personal property.
  • The population of the city or municipality in which the building is located determines the minimum rehabilitation cost required in order to claim the credit. The criteria are:
    • $75,000 in costs for locations with a population less than 1,000
    • $150,000 in costs for locations with a population between 1,000 and 25,000
    • $250,000 in costs for locations with a populations above 25,000
    • The credit can be used against income tax OR property tax.
    • The credit is earned in the year the revitalized building is placed in service, but is taken ratably over a 5 year period.

For additional information, visit the State Historic Preservation Office’s website or call Historic Augusta.