Historic Rehabilitation Tax Credits

Through the Federal and State Rehabilitation Tax Credit programs, property owners receive incentive for private investment in the preservation of historic buildings. Buildings that are individually listed in the National Register of Historic Places and the Virginia Landmarks Register, or are certified as contributing to a historic district that is listed on these registers, are eligible for the tax credits. Properties that have been evaluated as “eligible” for individual listing are also eligible for State rehabilitation tax credits. The City of Portsmouth boasts six (6) official historic districts. Usually properties in these historic districts will be eligible for this incentive program.

FOR THE FEDERAL PROGRAM
  • The cost of the rehabilitation must exceed the owner’s adjusted basis in the building, or $5,000, whichever is greater
  • The credit is 20% of the eligible rehabilitation expenses.
  • The credit applies to properties used for a business or other income producing purposes.
FOR THE STATE PROGRAM
  • Income-producing properties: The cost of the rehabilitation must be at least 50% of the assessed value of the year preceding the rehabilitation.
  • Owner-occupied properties (i.e. non-rental owner-occupied residential properties): The cost of the rehabilitation must be at least 25% of the assessed value of the building in the year preceding the rehabilitation.
  • The credit is 25% of the eligible rehabilitation expenses.
For more information, contact the Virginia Department of Historic Resources or visit www.nps.gov/tps/tax-incentives.