A 20% nonrefundable tax credit (not just a deduction) for the rehabilitation of historic buildings occupied by owners or used as residential rentals. You can deduct 20% of all qualified rehabilitation costs from your Utah income or corporate franchise taxes.
Example: $22,000 in qualified rehabilitation cost = $4,400 state income tax credit.
Any building listed in the National Register of Historic Places qualifies if, after rehabilitation, it is used as a residence (owner-occupied or rental).
You can’t take the credit for any property used for commercial purposes, including hotels or bed-and-breakfasts. (However, if the historic B&B is also owner-occupied, this portion of the rehabilitation may qualify.)
The building does not need to be listed in the National Register at the beginning of the project, but a complete National Register nomination must be submitted when the project is finished. The property must be listed in the National Register within three years of the approval of the
Staff of the Historic Preservation Office can evaluate the eligibility of your building and provide instructions on nomination requirements.
See more information about the National Register.
The work may include interior and/or exterior repair, rehabilitation, or restoration, including historic, decorative, and structural elements as well as mechanical systems. All of the proposed, ongoing or completed work must meet the Secretary of the Interior's Standards for Rehabilitation and be approved by the State Historic Preservation Office (SHPO).
Depending on the historic conditions and the specifics of the proposed rehab work, some examples of eligible work items include:
The purchase price of the building, site work (landscaping, sidewalks, fences, driveways, etc.), new additions, work on outbuildings, and the purchase and installation of moveable furnishings or equipment (window coverings, refrigerators, etc.) do not qualify for the credit.
All of the work must meet the Secretary of the Interior's Standards for Rehabilitation (See a great illustrated guide from the NPS) or the tax credit cannot be taken on any portion of the work.
You should submit a complete application to us (the State Historic Preservation Office, or SHPO) as early as possible. The state law requires application and approval by the SHPO prior to completion of the project.
We strongly recommend that you submit an application before starting work. Any work you begin without prior SHPO approval is done at your own risk. Once you have begun work, changes to bring the project into conformance with the Secretary of the Interior's Standards for Rehabilitation can be difficult, expensive, or occasionally impossible to make.
As part of the application you will need to submit
Feel free to contact us during any part of the process.
Total rehabilitation expenditures must exceed $10,000. (The tax credit applies equally to this first $10,000.) The purchase price of the building and any donated labor cannot be included. The project must be completed within 36 months. (There is no limit to subsequent $10,000+ projects; separate applications are required.)
The credit may be taken for the tax year in which the project was completed and the SHPO approves the rehabilitation work (as well as a National Register nomination, if needed). A unique certification number will be issued to the owner at that time. Credit amounts greater than the amount of tax due in that year may be carried forward up to five years.
All work done to the building during the rehabilitation project, and for three years following the certification of the project, must meet the Secretary of the Interior's Standards for Rehabilitation. Please consult with the State Historic Preservation Office if you have any questions.
The local review process will be helpful to tax credit application process but state law requires application to the State Historic Preservation Office (SHPO). Local preservation commissions sometimes have different requirements and other considerations than the Secretary of the Interior's Standards for Rehabilitation.
To qualify for the state tax credit, all of the work must meet the Standards and receive state approval. Application for the state tax credit must be made before the project is completed, preferably before work even begins (see the caution above).
After the work is completed and certified, we (SHPO) will provide you with a tax form, TC-40H, Historic Preservation Tax Credit. Do not submit this form with your tax return; keep it and all related documents with your tax records. If you carry forward an excess portion of this tax credit, you must attach a copy of the signed, original TC-40H
form, with the new carry-forward amount, to your subsequent tax return(s).
Note that carry-forward amounts must be applied against tax due before the application of any historic preservation tax credits earned in the current year and on a first-earned, first-used basis. Please consult with the State Tax Commission if you have any questions. Original records supporting the credit claimed must be maintained for three years following the date the return was filed claiming the credit.
Nelson Knight, 801-245-7244
State Historic Preservation Office
Utah State History
300 S. Rio Grande Street
Salt Lake City, Utah 84101
Utah State Tax Commission at 297-2200 or 800-662-4335.
Utah Heritage Foundation at 801-533-0858.
Division of Housing and Community Development at 801-538-8888