Rehabilitating an Historic House (and the Tax Credits that can help!)

By: Susan Griswold Herst

When rehabilitating an historic home, you never know what you will find behind drywall that has been erected by previous owners…. if you are lucky, you may find the original fixtures like back staircases, moldings, and butler’s pantries!  Many of the older homes in Durham qualify for State and Federal Historic Rehabilitation tax credits.  Think of them as gift certificates for your income taxes.  Here is some general information you may find helpful when considering rehabilitating non-income producing historic structures:

  • The present historic preservation tax credit measures provide a 30% state tax credit for qualifying rehabilitations of owner-occupied personal residences.
  • There are 18 National Register historic districts in Durham.  Think of them as a way of “protecting property value” in a neighborhood.
  • Please consult with the State Historic Preservation Office before beginning a rehabilitation to resolve design or rehabilitation problems that could result in denial of the credits.  (Only costs incurred upon or within a historic structure will qualify.  In general the front and main public rooms of the house should not be altered).
  • Only certified historic structures will qualify for the credits, i.e. a structure that is listed in the National Register of Historic Places, either individually or as a contributing building in a National Register or local historic district certified by the Department of Interior.
  • Owners are strongly urged to secure National Register listing of their property prior to beginning a certified renovation.
  • The rehabilitation must exceed $25,000 within a 24-month period, sometime during the project.
  • The credits cannot be claimed against the cost of acquisition, enlargement of an existing building (additions), site work, or personal property.
  • The application processing fee is @$250 and the application process can take 4-6 weeks.

There are many historic residences in Durham.  At Urban Durham Realty, we value the rich historical roots of our community which these tax credits promote.

For more information, please consult David Christenbury, Preservation Architect, or Ann Swallow, National Register Coordinator of the N.C. Division of Historical Resources, www.hpo.dcr.state.nc.us.  Thanks go to Heather Wagner of hmw Preservation and Sara Davis Lachenman of Four Over One for their insights.

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2 Responses so far »

  1. 1

    florrie H said,

    this information is so interesting. Many homes are demolished with no thought to what lies beneath. I appreciate reading this, not only for the tax advantage, but for the surprises that may be unexpected.
    I think you must be a darn good realtor, TAKE IT FROM ONE WHO KNOWS !!!!

  2. 2

    Aaron Lubeck said,

    Just to clarify – the application fee is $250 for part A. It is a sliding scale for part B ranging from $0-$1000+ depending on the size of the rehabilitation. It is, by any measure, still very very much worth it. Incidentally, though Durham is the 6th biggest city in the state, we perpetually lead the state in both volume and size of these applications.


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