National Trust: Senate Bill Would Improve Federal Preservation Program and Encourage Greater Investment in Historic Buildings
Statement by Stephanie K. Meeks, president of the National Trust for Historic Preservation
The Historic Tax Credit Enhancement Act of 2018 introduced today in the U.S. Senate would enhance the value of the federal historic tax credit program. The following is a statement from Stephanie K. Meeks, president and CEO of the National Trust for Historic Preservation:
“The federal historic tax credit, our strongest federal preservation incentive, has transformed tens of thousands of underused buildings for new and productive uses, created millions of good-paying jobs, and attracted more than $131 billion in private investment for cities and towns across America. This legislation will build on the many decades of success of the program and bring it into alignment with other, more recently-enacted tax incentives. It modernizes the credit while minimizing costs and maximizing economic impact for communities throughout the country.”
About the Federal Historic Tax Credit
For more than three decades, the federal Historic Tax Credit (HTC) has successfully implemented a national policy of preserving our historic resources. It is the most significant investment the federal government makes toward the preservation of our historic buildings. Since 1981, the credit has leveraged more than $131 billion in private investment, created more than 2.4 million jobs, and preserved more than 42,000 historic buildings that form the fabric of our nation. Watch this short video of President Reagan’s own words here:
About the Historic Tax Credit Enhancement Act of 2018
The Historic Tax Credit Enhancement Act of 2018 would eliminate a provision of the tax code that requires a basis adjustment equal to the amount of the historic tax credit. Implementing this change will add value to the incentive and make it easier to undertake difficult rehabilitation projects.
When a building’s basis is reduced, depreciation deductions over the tax life of the building are less than they would otherwise be in any other real estate transaction. In addition to the reduced value of the tax losses that would have been available through depreciation, the potential taxable gain upon sale of the building also increases. By eliminating the basis adjustment, the HTC would mirror the LIHTC program, strengthen investment by maximizing the value of the credit to investors, and result in more dollars going into historic rehabilitations.