|
North Carolina preservation state tax credits, effective January 1, 1998,
have made rehabilitations of historic buildings in the Tar Heel state
more attractive than ever before.
The law provides:
- A 20% state tax credit for rehabilitations of income-producing
historic properties that also qualify for the 20% federal investment
tax credit. In effect, the combined federal-state credits reduce the
cost of a certified rehabilitation of an income-producing historic structure
by 40%.
- A new state tax credit of 30% for qualifying rehabilitations
of non-income-producing historic structures, including owner-occupied
personal residences. There is no equivalent federal credit for such
rehabilitations.
Some key points and cautionary reminders about the credits:
- The new credits will apply only to qualified expenditures made on
or after January 1, 1998.
- Only certified historic structures will qualify for the credits. A
"certified historic structure" is defined as a building that
is listed in the National Register of Historic Places, either individually
or as a contributing building in a National Register historic district,
or as a contributing building within a local historic district that
has been certified by the Department of the Interior. (There are only
three of the latter in North Carolina. These are the Blount Street Historic
District in Raleigh, the Goldsboro Historic District, and the Decatur-Hunter
Historic District in Madison).
- A non-income-producing building must be a "certified historic structure"
at the time the state credit is taken -- that is, it must actually be
listed in the National Register either individually or as part of a
district or it will not qualify for the state credit. The federal tax
credit for income-producing buildings provides for "preliminary
certification" that enables an owner to take the credit for a qualifying
rehabilitation even before the structure is actually listed in the National
Register of Historic Places. There are no such provisions for preliminary
certification in the state law for non-income-producing historic structures.
- An owner may begin a rehabilitation project on a non-income-producing
property following approval of rehabilitation plans by the State Historic
Preservation Office but prior to the listing of the property in the
National Register, with the intention of having it listed in the Register
by the time is project is completed. However, because listing of a property
by a desired deadline cannot be guaranteed, owners are strongly advised
to secure National Register listing of their non-income producing property
prior to beginning a certified rehabilitation.
A property is listed in National Register of Historic Places by a nomination,
which is a research report prepared according to detailed state and federal
guidelines. The final authority on National Register listing is the federal
Keeper of the National Register in Washington, D.C. In its role as administrator
of the National Register program in North Carolina, the N.C. State Historic
Preservation Office is charged with ensuring that nominations forwarded
by the State Historic Preservation Officer to the Keeper are complete and
correct. The State Historic Preservation Office provides direction to preparers
but does not write nominations. Most nominations are prepared by private
consultants hired by property owners, local governments, or private non-profit
organizations. The nomination process typically takes a minimum of six months,
and may take much longer.
- The rehabilitation of the historic structure must be substantial.
For income-producing properties, the rehabilitation expense must exceed
the greater of the "adjusted basis" of the building or $5,000
within a 24 month period or a 60 month period for phased projects. For
non-income-producing properties, the rehabilitation expense must exceed
$25,000 within a 24 month period.
- All rehabilitation work must meet the Secretary
of the Interior's Standards for Rehabilitation. Applications for
income-producing structures are subject to a joint review by the N.C.
State Historic Preservation Office and the National Park Service, with
final authority resting with the National Park Service. Applications
for non-income-producing historic structures are reviewed solely by
the State Historic Preservation Office and must be approved prior
to the commencement of work. Rules for the application and review
procedure will be promulgated by the North Carolina Historical Commission.
- The credits cannot be claimed against the cost of acquisition, new
additions, site work, or personal property. Only costs incurred in work
upon or within a historic structure will qualify. Interior work such
as HVAC work and kitchen and bathroom remodelings will qualify if the
work meets "The Secretary
of the Interior's Standards for Rehabilitation."
- Rehabilitation work on non-income-producing historic structures
must be approved by the State Historic Preservation Office prior to
the commencement of the work!! Property owners of income-producing
properties are strongly advised to consult with the State
Historic Preservation Office before beginning a rehabilitation
to resolve potential design and rehabilitation problems that could result
in denial of the credits.
For applications and further information, contact
David Christenbury, Preservation Architect and State Tax Credit Coordinator
Restoration Branch
N.C. State Historic Preservation Office
Office of Archives and History
4613 Mail Service Center
Raleigh, NC 27699-4613
Telephone: (919) 733-6547
Fax: (919) 715-4801
e-mail: david.christenbury@ncmail.net
For information about the National Register of Historic Places and the
requirements and procedures for listing, contact
Claudia R. Brown, Branch Supervisor
Survey and Planning Branch
N.C. State Historic Preservation Office
Office of Archives and History
4618 Mail Service Center
Raleigh, NC 27699-4618
Telephone: (919) 733-6545
Fax: (919) 715-4801
e-mail: claudia.brown@ncmail.net
|