- Last Updated on Wednesday, 11 April 2012 20:48
- Written by The Times Weekly
- Category: State News
Incentives for historic properties reduce tax burden, revitalize the economy
It sounds like a political campaign promise – a pledge to reduce taxes and revitalize the economy. But that’s what the owners of historic properties can do when they take advantage of a tax incentive program jointly administered by the Illinois Historic Preservation Agency and the National Park Service, which has had a $2.3 billion economic impact in the state during the past 12 years. This translates into more than 37,000 jobs based upon a national economic impact study.
The Historic Preservation Tax Credit Program for income-producing properties offers lucrative tax incentives for rehabilitating historic structures. The program rewards property owners for their historic preservation efforts, while the property owners produce construction jobs, purchase local materials, preserve history, and foster community pride as a result of their rehabilitation work.
Illinois led the nation in 2011 with $365 million in completed tax incentive historic rehabilitation projects. Since 2000 the state has seen a total of $2.3 billion in private investment in these projects, which translates to $460 million in tax incentives for Illinois property owners.
The Federal Tax Reform Act of 1986 allows an income tax credit equal to 20 percent of the rehabilitation expenditures for certified historic commercial, agricultural, industrial, or rental residential buildings. The credit may be subtracted directly from federal income taxes owed by the owner. Eligible properties have to be listed on the National Register of Historic Places.
In addition to the federal tax credit program, Illinois offers a state income tax credit through the Department of Commerce and Economic Opportunity of 25 percent through December 2016 to owners of certified historic structures located within designated River Edge Redevelopment Zones in Aurora , East St. Louis , Elgin , and Rockford .
The federal and state tax credit programs have benefits for communities as well – they encourage the protection of landmarks, increase the value of the rehabilitated property, return underutilized structures to the tax rolls, upgrade downtowns and neighborhoods, and often increase the amount of available housing within the community.
Historic rehabilitation projects have “green” benefits as well. When historic buildings are renovated rather than replaced, huge amounts of waste are not created and the impacts of making new construction materials are avoided. Historic structures are also proving to be just as energy efficient as new green buildings.
“Historic preservation, encouraged by incentives, is proving to be a winning strategy in meeting the environmental, economic and equity goals of sustainable design,” said Mike Jackson, FAIA, Preservation Services Division Manager.
Specific standards must be met to be eligible for the federal and state historic preservation tax incentives. For more information, visit http://www.illinoishistory.gov/PS/financial.htm.