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Rehabilitation Tax Credits

Federal and State Rehabilitation Tax Credits

The preservation of historic buildings benefits communities. Historic places connect us to our heritage and enrich the quality of our lives in many tangible and intangible ways. Their preservation also provides demonstrable economic benefits.

Through the federal and state rehabilitation tax credit programs, property owners are given substantial incentives for private investment in preservation, resulting in enormous advantages to the public.

Both the federal and state tax credit programs are administered in Virginia through the Department of Historic Resources.

State tax credits are available for owner-occupied, as well as income-producing buildings. If your property is income-producing, you may also be able to take advantage of federal tax credits. Additional information and assistance with tax-credit projects may be requested from DHR's Richmond office. Contact Elizabeth Tune at (804) 482-6093 or Chris Novelli at (804) 482-6097.

DHR also conducts a Tax Credit Open House on the first Friday of each month from 9 a.m. to 12 noon at our DHR Headquarters in Richmond. During open houses, DHR tax credit staff are available to meet with applicants and potential applicants to discuss tax credit projects on an informal basis. To schedule an appointment for a Tax Credit Open House, contact Chris Novelli at (804) 482-6097. Appointments are limited to 20 minutes because of demand.

Statewide Economic Benefits of the Tax Credit Program:

A study conducted in 2007 (and updated in 2010) concluded that since the state tax credit program's inception in 1997, it has spurred private investment of approximately $1.5 billion in the rehabilitation of more than 1,200 landmark buildings. This investment in turn has generated an economic impact of nearly $1.6 billion in the Commonwealth and created more than 10,700 jobs and $444 million in associated wages and salaries (for more information, see this January 2008 publication Prosperity through Preservation ).

This money represents costs paid into the construction industry for architects, contractors, craftsmen, and suppliers, with a corresponding increase in local employment. The capital improvement to the buildings results in significant increases in local property taxes, as well as a general enhancement in commercial activity. The rehabilitated buildings provide needed housing (in many cases, low- and moderate-income housing), and office, retail, and other commercial space. As a result, communities benefit from property improvements, blight removal, and increased occupancy of buildings in historic core neighborhoods.

Updated 1.10.2014