TAX INCENTIVES FOR
federal tax incentives are available for owners of
historic buildings in Alabama.
In May 2013,
Alabama created a state historic preservation income
tax credit for owners who rehabilitate residential
or commercial properties.
Alabama Historic Rehabilitation Tax Credit Program
The State of Alabama
offers a tax credit of up to 25% for the substantial
rehabilitation of a historic residential or
commercial property. Twenty million in tax credits
are available each calendar year beginning in 2013.
The AHC accepts and
reviews applications on a first-come, first-served
basis and reserve credits in the order in which the
applications are received. Once the annual tax
credit allocation has been reserved, the AHC will
place later applications on a waiting list.
Under the current
legislation, 2015 will be the last year these tax
credits are available unless legislation is passed
to extend the program. A summary of the program, its
legislation and regulations, and its application
forms are found below.
For information about
the program, contact Jennifer Bailey at
Jennifer.Bailey@preserveala.org or 334-230-2643.
Important Documents and Links
Rehabilitation Tax Credit Application Forms
Rehabilitation Tax Credit
A federal rehabilitation
tax incentive allows a federal income tax credit for
20% of the amount spent to rehabilitate
income-producing historic buildings. Buildings must
be listed in the National Register of Historic
Places and must be income-producing to the owner.
The rehabilitation costs must be substantial, which
means that rehab expenses exceed the adjusted basis
of the property. The rehabilitation must follow
Rehabilitation Standards that protect the historic
character and historic materials that make up the
building. Plans for the project must be approved
ahead of time by the National Park Service. The
Alabama Historical Commission helps owners through a
three-part application process with the National
It is important for owners
interested in this program to read all of the
National Park Service and Internal Revenue Service
requirements. Involving your accountant, architect
and contractor, and the AHC early in the planning
process is highly recommended.
more about the program requirements, visit
"Before You Apply" for details about
eligibility requirements and IRS regulations. See
"The Standards" for guidance on the
recommended treatment of historic buildings to
insure a successful tax credit project. See
"Application Process" for required
documentation and to download fee forms, the
application, and instructions.
There is also a
10% federal income tax credit available for
rehabilitating income-producing buildings built
before 1936 but NOT listed in the National Register.
Details about this program are also available at the
National Park Service website:
National Park Service Tax Incentives video:
Director Jarvis Discusses the tax incentives
The following information sheets may be downloaded:
Preservation Tax Incentives Fact Sheet
A basic summary of the Alabama property tax reduction
and the federal rehabilitation tax credit program.
Tips for a Successful
Things to consider before beginning
This is required for applications
going to the National Park Service.
Checklist for a
A list of requirements
for each part of the application.
Alabama Property Tax Incentive
In Alabama, commercial historic buildings can be
assessed for ad valorem purposes at 10% instead of
the usual 20%. Complete an application for your
historic building; submit the application, photos,
and location map to the Alabama Historical
Commission; and take the AHC response letter to your
tax assessor for the property tax reduction.
Ad Valorem Assessment Application.
Federal Tax Incentives and Ad Valorem benefits:
Chloe Mercer at
Alabama Rehabilitation Tax
Credit: Jennifer Bailey at