An important federal program for encouraging private investment in historic buildings involves the tax incentives available for some owners and developers. For certain qualifying projects, the owner may claim 20% of their rehabilitation project costs as investment tax credits that can be applied to their federal income tax.
The basic Internal Revenue Service requirements are:
- The building must be used for an income-producing purpose. Single-family, owner-occupied homes do not qualify.
- The rehabilitation must be substantial (as determined by a formula involving the adjusted basis of the building).
- The property must be ready to be occupied and put back in productive use.
- The building must be certified by the National Park Service as an historic structure.
- The rehabilitation project must be approved by the SHPO and National Park Service as meeting the Secretary of the Interior’s Standards for the Rehabilitation of Historic Buildings.
- Other requirements as established by IRS or NPS regulations.
The overall intent of the program is to provide private owners and developers with an attractive financial incentive to make a major investment in older buildings. This highly successful federal program, in existence in various forms for over 30 years, has created thousands of jobs and injected new long-term financial life into often neglected or under-used historic buildings throughout the nation. In the past several years the program has generated over $35 million in private investment in over 50 historic buildings around Idaho.
The Idaho SHPO has a formal role in the rehabilitation tax credit application process, including (but not limited to) providing technical information on meeting the Secretary’s Standards, processing, reviewing, and commenting to the National Park Service about certification applications, and giving other advice to building owners, developers, and architects involved in such projects.
Building owners seeking application and certification instructions should read the Historic Tax Credit Handout.
The National Park Service explains the tax incentives and rehabilitation standards on their website. The NPS also has recently released a report on the impact of the Tax Credit program in 2018; nation-wide, the program generated $7.4 Billion in GDP and 129,000 jobs in 2018 alone!
Another federal financial incentive for historic preservation, specifically with regard to conservation easements, is the charitable deduction provisions of IRS code. In some cases, owners of historic properties may qualify for a charitable deduction by donating a facade easement (conservation easement) on their historic property to an appropriate recipient such as a unit of government or other non-profit entity. Such easements place restrictions on what future owners may do with the exterior of the building thus preserving the property for historic purposes. The reduction of market value with the easement is treated as a charitable deduction on the donor’s federal taxes (similar to donating a painting to a museum).
For more information or assistance, contact our office by phone at (208) 334-3861 or by email.
Important Note: The preceding information is a general discussion of certain provisions of federal tax law and Internal Revenue Service regulations and is presented here for general information purposes only. Persons interested in these programs are advised to seek counsel from trained tax law professionals.
What is Preservation Planning?
The American Planning Association describes planning as the process of working to improve the welfare of people and their communities by creating more convenient, equitable, healthful, efficient, and attractive places for present and future generations. Historic Preservation planning, then, is the application of this approach to historic preservation efforts at all levels, from the federal level down to neighborhood groups working toward getting their neighborhood listed and everything in between. The historic preservation planning process involves a rational and methodical approach, which works to develop shared vision and specific goals and priorities for the preservation of historic, cultural, and archaeological resources. Moreover, proper historic preservation planning will also provide a clear and effective path to achieving those goals and reaching that overall vision.
Historic Preservation Planning in Idaho is comprised of a wide range of activities, including: the development of both the statewide comprehensive historic preservation plan, as well as local historic preservation plans for counties and municipalities; identification and development of historic contexts; management planning for specific cultural resources; and gathering and analyzing information about historic resources in order to identify and define priorities. Preservation planning is an ongoing activity, subject to continuous modification and input and is closely related to all the other SHPO program areas.
The Idaho State Historic Preservation Plan
The Idaho Historic Preservation Plan (IHPP) establishes the priorities and goals for the historic preservation community throughout the State of Idaho. This community includes individuals and organizations on all levels and of all types, not just the State Historic Preservation Office; it also includes Tribes, nonprofit organizations, private firms, other government agencies, historic preservation commissions, owners of historic properties, and individuals. With so many different groups and organizations making up Idaho’s historic preservation community, it is necessary to have a common framework for our efforts. The purpose of the IHPP is help ensure that all of these dedicated and passionate preservationist are better able to carry out the work necessary to try and bring the Plan’s vision to reality. Idaho’s historic, archaeological, and cultural resources represent the physical and tangible manifestations of our history; they reflect who we were, where we came from, where we are now, and help shape our outlook for the future. By protecting, preserving, and understanding these important resources, we can understand the past, the present, and the future, not as separate events or periods, but as an on-going narrative. Therefore, it is the vision of Preserving Our Past, Enriching Our Future: The Idaho State Historic Preservation Plan, 2016-2022 to take purposeful steps and actions to create a state-culture in which Idaho’s historic, archaeological, and cultural resources are recognized as important in the lives of Idahoans, understood and readily accepted as relevant to today, and in which all people in the state, residents and visitors alike, are actively engaging in preserving, sharing, and using those resources to inform and positively influence the future of the State of Idaho.
For more information on Preservation Planning or the Idaho State Historic Preservation Plan, please contact the Historic Preservation Planner at (208) 334-3861 or by email.
2023-2030 Idaho State Historic Preservation Plan Update
The Idaho State Historic Preservation Office has begun the process to update our State Historic Preservation Plan. For more information on the Plan update process, please visit the 2023-2030 Idaho State Historic Preservation Plan Update page.
Certified Local Government (CLG) communities are those that shown a commitment to historic preservation. They have done this by adopting a local ordinance and creating a historic preservation commission. The program is a dynamic partnership between local governments, the Idaho State Historic Preservation Office (SHPO), and the National Park Service (NPS). It assists local communities in preserving their unique historic character. The Certified Local Government program also provides technical assistance and small grants to local governments. Most importantly, communities use the grants to preserve their historic resources for future generations. The CLG program gives local communities a more active level of participation in the National Register of Historic Places program and a greater say in any federally funded projects in their area.
On of the biggest benefits of the program is the CLG Grant program. Communities use these grants for a wide range of projects: surveys, National Register nominations, tour flyers, historic preservation plans, and even some bricks-and-mortar projects. In recent years, the Idaho SHPO has distributed over $77,000 annually to CLGs. Because of the CLG program, over $2 million dollars have been injected directly into local communities since 1983.