Quick Facts about the State Historic Tax Credit
If you're renovating an historic property, the State of Michigan has an income tax credit program that will return 25% of the cost to you. More information and forms are on the State of Michigan website. HBEA has put together a quick run-down:
- Property must be in a locally designated historic district, such as the Boston-Edison Historic District.
- Total cost of project or group of projects must be at least 10% of the SEV (State Equalized Value) of the property.
- Work must be approved by the State Historic Preservation Office and meet "The Secretary of the Interior's Standards."
- The work is reviewed by the State by submitting a 3 part application. Each part can be submitted separately or as one package to the State. There are application fees.
- "Before" photographs are essential to the application.
- Work must take place within a five year period.
- You can get 25% of the cost of your rehabilitation work back through your state income taxes as a income tax credit.
- You get the credit in the year that part 3 of the application is certified.
- If your credit exceeds your tax liability for that year the credit can be carried forward until it is used up or for 10 years, whichever comes first.
- Interior and exterior work both qualify as expenses for the credit. Examples of work that qualify: window repair, porch repair, tuckpointing, painting, new furnace/air conditioning, new plumbing, new wiring, kitchen remodeling, hardwood floor refinishing.
- Types of work that does NOT qualify: new appliances, new fencing, additions, landscaping.
- Even if your work is approved by the state you must still get exterior work approved by the Historic District Commission and vice versa. They are 2 separate processes.
- It is highly recommended that you get work approved by the State BEFORE you undertake your project. Even if only part of your project does not meet "The Secretary of the Interior's Standards" you will not receive the credit for any part of your rehabilitation and you will not be eligible to apply for the credit for 5 years.
Useful information for completing the application
- The application forms and instructions can be downloaded from the State of Michigan website.
- The current population of the city of Detroit can be found on the US Census Bureau website.
- Some information about your house, including year built, can be obtained from the city of Detroit Propoerty Tax lookup service. Register for your free lookup, enter your address, and click on your parcel, and "Property and Land" under "Related Details."
- The historic significance of the Boston-Edison Historic District is outlined in this pdf from the City of Detroit HDC.
- A map of the Boston-Edison Historic District is included in the same pdf from the HDC. A more detailed map is pictured maps page of the HBEA website.
- Both the "Declaration of Location" and the "Verification of State Equalized Value" can be obtained from the City of Detroit Historic District Commission Office. Contact them on this page.
- For even more information, visit the state website on tax credits for historic preservation. Questions can be directed to: Bryan Lijewski, 517-373-1631 or lijewskib@michigan.gov.
