The Calhoun Estate
Last month we looked at the National incentives for renovation of a historic property. This month we are going to look at the incentives for the state of Georgia. We are very lucky that Georgia has some of the most lucrative tax incentives at the state level of any state.
Currently there are two programs. The first is the State Income Tax Credit Program for Rehabilitated Historic Property. Similar to the National incentive, this is a tax credit, not a deduction. This will give you a dollar for dollar reduction to Georgia State Income taxes. The program is administered by the Georgia Department of Natural Resources Historic Preservation Division (DNR-HPD) and the Georgia Department of Revenue. Owners of both residential and commercial property may be eligible for this incentive. There are two main differences between the National and State program. Unlike the National program, the Georgia State program includes a primary residence. It does not need to be income producing property, though that qualifies as well.
The Glenn House
For a primary residence which complete a DNR approved rehabilitation, owners may take up to a 25% of rehabilitation cost credit up to $100,000. Some target areas are given a 30% cost credit also with a cap of $100,000. An example would be if a homeowner did a $100,000 approved rehab, they would be eligible to take a $25,000 credit off of their Georgia State income taxes. This could also be allocated over a 5-year period.
For an income producing property, the credit is 25% if the rehabilitation expenditures capped at $300,000. In January of 2016 two additional program categories became available providing income tax credits capped at $5million and $10 million per project with a $25 million annual program cap. (The $10 million cap category has additional employment and / or wage requirements. )
To be eligible, the property must be listed or be eligible for listing in the Georgia Register of Historic Places, either individually or as a contributing building within a historic district.
The second program is the Stare Preferential Property Tax Assessment Program for Rehabilitated Historic Property. This program can freeze property assessments in both Residential and Commercial properties for 8.5 years.
Property must be listed or eligible for listing in the Georgia Register for Historic Places.
The cost of the rehabilitation must meet the substantial rehabilitation test.
Residential Owner Occupied property must have the rehabilitation increase the fair market value of the property by a minimum of 50%. In a Residential Mixed Use property (primarily owner occupied but may also be partially income producing) must increase the fair market value by 75%
Commercial and Professional Use property (income producing property) must increase the fair market value by at least 100%. The property must obtain preliminary and final certification of the project from HBD. Rehab must be in accordance with the Department of Natural Resources Standards for Rehabilitation.
The application process is quite involved. Please contact us with questions and resources to help you get approval.
photos courtesy Michelle Mechem