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.
- 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.
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. Requests for applications to: 517-373-1630 or 313-224-6536 or 313-224-8907.