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Alabama Historical Commission, Alabama SHPO
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TAX INCENTIVES FOR HISTORIC BUILDINGS

State and 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

Historic Rehabilitation Tax Credit Application Forms

  
Federal 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 Park Service.

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.


To read more about the program requirements, visit www.nps.gov/tps/tax-incentives.htm.  See "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
: www.nps.gov/tps/tax-incentives.htm.

 

National Park Service Tax Incentives video:
Director Jarvis Discusses the tax incentives

 

 

The following information sheets may be downloaded:

Historic 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 Project
Things to consider before beginning your project.

Courier Delivery Payment form
This is required for applications going to the National Park Service.

Checklist for a Complete Application
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.

 

Contacts
Federal Tax Incentives and Ad Valorem benefits: Chloe Mercer at chloe.mercer@preserveala.org or 334-230-2669.

Alabama Rehabilitation Tax Credit: Jennifer Bailey at jennifer.bailey@preserveala.org or 334-230-2643.


Historic Preservation