Redevelopment provides cultural and aesthetic benefits to communities. The redevelopers, however, may be unaware of the financial incentives that support these efforts. Historic tax credits can be a valuable incentive for the redevelopment of historic buildings, both commercial and residential.
The most significant tax incentives in this area are the 20 percent tax credit provided by the federal government and the 25 percent tax credit provided by the Missouri Department of Revenue for qualified rehabilitation expenditures (QREs) used to rehabilitate certified historic buildings. Other states, in addition to Missouri, have historic or rehabilitation tax credits available. The following qualifications apply:
- The building must be a certified historic structure or located in a certified historic district
- The project meets a ‘substantial rehabilitation’ test
- To qualify for federal tax credits, the building must be used for income-producing purposes such as for a trade or business after rehabilitation (the state of Missouri does allow tax credits on the rehabilitation of personal residences)
- The rehabilitation adheres to the Secretary of the Interior’s Standards for Rehabilitation
Brown Smith Wallace can offer consulting on valuable cost savings for anyone interested in redeveloping a historic building. Our experienced team is well-versed in how to identify and leverage tax credits and incentives for businessowners. Contact our team today to learn how we can support your business.