HISTORIC TAX CREDIT & TAX REFORM
The federal Historic Tax Credit (HTC) was created in 1981 as an incentive to
catalyze economic development through the restoration and reuse of
America’s historic buildings. Since its inception, the HTC has been a widely
used redevelopment tool, helping revitalize cities, towns and rural
communities all across the country. The HTC has a proven track record for
stimulating economic growth through private investment that creates good
paying, local jobs.
The HTC is administered by the National Park Service and the Internal Revenue Service in
conjunction with the State Historic Preservation Offices, and is comprised of two distinct and
separate tax credits used to rehabilitate all types of income producing historic buildings like
vacant schools, warehouses, factories, retail stores, apartments, hotels and office buildings
throughout the country.
The 20 percent credit
The 20 percent credit applies only to certified historic structures. A certified historic
building is one that is listed individually on the National Register of Historic Places, or
contributes to the character of a National Register-listed Historic District. The 20 percent
credit is available for any income producing commercial property.
The 10 percent credit
The 10 percent credit is for the rehabilitation of older, non-residential buildings built
before 1936. The pre-1936 building must meet certain wall and structure retention
requirements.
A Successful Federal Program:
ECONOMIC DEVELOPMENT, JOB CREATION, AND HERITAGE PRESERVATION

Since inception, the HTC has rehabilitated more than 40,000 buildings, created nearly 2.5
million jobs and leveraged $117 billion in private investment nationwide.

On average, the credit leverages $5 dollars of private investment for every $1 dollar in
federal funding creating highly effective public-private partnerships.

The cumulative $21 billion cost of this program has been more than offset by the $26.6
billion in federal tax receipts generated solely by these rehabilitation projects.

The HTC has revitalized the historic cores of cities and towns across America, enhancing
property values, encouraging additional reinvestment by adjacent owners and
augmenting tax revenue for federal, state and local governments.
Preservation Action/202-463-0970  National Conference of State Historic Preservation Officers/202-624-5465  American Cultural Resources Association/202.567.7594
National Trust for Historic Preservation/202-588-6000  National Trust Community Investment Corporation/202-588-6049  Historic Tax Credit Coalition/202.567.2900
National Association of Tribal Historic Preservation Officers/202-628-8476  National Alliance of Preservation Commissions/706-542-0169
HISTORIC REHABILITATION TAX CREDIT
As Congress examines ways to update and improve our nation’s tax
code, there is a critical opportunity to modernize the Historic Tax Credit
so that it functions more effectively in a dynamic economy and better
serves the needs of both large and small communities.

Since it was permanently written into the tax code more than 30 years ago, the HTC has
been a widely used redevelopment tool for inner cities, towns, and rural communities across
the country.

When the HTC was examined by Congress in the lead up to the 1986 Tax Reform bill,
legislators concluded an incentive to rehabilitate historic structures remained justified. The
report accompanying the bill reasoned that without the HTC market forces would drive
investment away from more expensive rehabilitation and urban cores and toward more
predictable new construction in the suburbs.

This justification is as valid today as it was then. Developers, both large and small, report
that historic rehabilitation projects would not occur without the HTC. Even in situations where
developers benefit from lower tax rates, the less profitable option of historic preservation will
not be favored over building on previously undeveloped commercial sites. Absent the HTC,
which fills a critical financing gap, there will be a halt to the rehabilitation of historic
commercial properties in the United States.

In 2012, the National Park Service commissioned a study that concluded the HTC generates
a significant return on investment for the federal government. According to the Park
Service, over the life of the program the IRS has issued $20.5 billion in tax credits while
generating more than $25.9 billion in direct federal tax revenue from income taxes paid by
material manufacturers, construction workers, and the retail and service sector tenants that
ultimately occupy rehabilitated properties.

The HTC continues to fulfill the federal public policy goal set forth in the National Historic
Preservation Act of 1966 of preserving the nation’s architectural heritage by rehabilitating
historic structures that tell America’s story. It benefits communities throughout the nation
where thousands of iconic historic buildings have been brought back to life and are
contributing to the local economy.

As Congress examines ways to improve our nation’s tax code, there is a critical opportunity
to modernize the HTC so that it better serves the needs of both large and small communities
throughout the country. Legislation is being considered that will make several practical
changes to the current program that will enhance the HTC’s ability to preserve historic
buildings and revitalize our communities.
Preservation Action/202-463-0970  National Conference of State Historic Preservation Officers/202-624-5465  American Cultural Resources Association/202.567.7594
National Trust for Historic Preservation/202-588-6000  National Trust Community Investment Corporation/202-588-6049  Historic Tax Credit Coalition/202.567.2900
National Association of Tribal Historic Preservation Officers/202-628-8476  National Alliance of Preservation Commissions/706-542-0169