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CT Historic Homes Rehabilitation Tax Credit Program
Public Act 99-173 established a Historic Homes Rehabilitation Tax Credit for the rehabilitation of owner-occupied historic residential buildings containing 1-4 units.
In hopes of sparking revitalization and stabilization in Connecticut's urban neighborhood and preserving the historic character of communities, the General Assembly established the Public Act 99-173 the Historic Homes Rehabilitation Tax Credit in 1999. The tax credit for the rehabilitation of owner-occupied historic residential buildings containing 1-4 units, also encourages new homeownership and assist existing homeowners to maintain or renovate their property.
What is the Incentive? A tax credit equal to 30% of the eligible rehabilitation costs up to a maximum of $30,000 per unit of housing. For example a four-family house could qualify for up to $120,000 in tax credits.
What properties are eligible? Properties that are listed on the National Register of Historic Places or State Register of Historic Places are eligible. Targeted areas in 29 towns and cities are eligible:
Ansonia
Bridgeport*
Bristol
Danbury
Derby
East Hartford
East Haven
Enfield
Griswold
Groton
Hartford*
Killingly
Manchester
Meriden
Middletown
New Britain
New Haven*
New London*
Norwalk
Norwich
Plainfield
Shelton
Shelton
Stamford
Torrington
Vernon
Waterbury*
West Hartford
West Haven
Windham*
* An asterisk indicates that the entire municipality is eligible.
Who can utilize the credits? Any owner, including private developers and non-profit housing corporations, can apply for the credits. If applicable, the owner can claim the credits against the owner's business corporation taxes due or the owner can assign the tax credit to a business corporation that is providing funds to help finance the rehabilitation. A lender, for example, might agree to accept the tax credit as partial payment against the principal of a loan. The tax credit cannot be used against the personal income tax.
What is the minimum expenditure? The owner must incur qualified rehabilitation costs of at least $25,000. Eligible costs include interior and exterior work to the historic home but exclude site improvements or soft costs, such as architect's fees or loan-processing fees.
What is the owner-occupancy requirement? At least one unit of the building must be the personal residence of the owner for five years after the credit voucher is issued. Private developers and non-profit housing corporations are required to sell the property to a new owner who will make the historic home the new owner's personal residence during the occupancy period.
How does an owner apply for the tax credits? An owner is required to submit a rehabilitation plan and cost estimate to the State Historic Preservation Office and obtain approval before beginning work. Upon approval, the Commission will reserve the tax credits. Work must conform to the Secretary of the Interior's Standards for Rehabilitation. It is recommended that owners seek funding before applying.
When can the tax credits be claimed? The State Historic Preservation Office will issue a tax credit voucher only after satisfactory completion of the rehabilitation work. The tax credit can be claimed for the tax year in which the voucher is issued. Unused credits can be carried forward to any or all of the four following years.
For more information regarding the Connecticut Historic Homes Rehabilitation Tax Credit Program contact the State Historic Preservation Office (State Historic Preservation Office) - link provided below.
Examples of properties using the Historic Homes Rehabilitation Tax Credit have been provided below.
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