A new version of the Historic Tax Credit Growth and Opportunity Act (HTC-GO) was reintroduced by Rep. Darin LaHood (R-IL) and Rep. Tom Suozzi (D-NY) in the U.S. House and Sen. Bill Cassidy (R-LA) and Sen. Mark Warner (D-VA) in the U.S. Senate. The bill would return to a one-year delivery of the historic tax credit (HTC). Other new provisions would specifically encourage smaller and rural projects with a boost in credit, and a new allowance for transferring credits

“The federal historic tax credit is one of our most powerful tools for historic preservation, economic development, and community revitalization,” said Carol Quillen, President and CEO of the National Trust for Historic Preservation. “The leadership of Senators Cassidy and Warner, with the strong support of long-time champions Senators Collins and Cantwell and Representatives LaHood and Souzzi, attests to the role the historic tax credit plays in reenergizing communities across the country. With the reintroduction of the Historic Tax Credit Growth and Opportunity Act, we take a crucial step towards empowering Americans in every state to invest in older and historic buildings, neighborhoods and commercial districts. These investments support small businesses, create housing, and generate economic opportunity as they build community connection and engagement. This time-tested community-serving incentive demonstrates how preservation efforts serve the public good. We’re grateful to our Congressional champions for their steadfast support of the federal historic tax credit and look forward to supporting this effort in upcoming tax discussions.”

The enhanced HTC-GO bill includes the following provisions:

Returns to a 1-year delivery of Historic Tax Credits for all projects

• Since 2017, the 20% tax credit has been delivered over 5-years (4% per year), this provision will return delivery of the HTC to 1-year.

Lowers the Substantial Rehab Test from 100% to 50% of a building’s basis

• Lowers the substantial rehabilitation threshold, making more projects eligible to use the HTC.

Eliminates the HTC Basis Adjustment Requirement

• Eliminates the requirement that the amount of the HTC must be deducted from a building’s basis (the property’s cost for tax purposes), increasing the value of the HTC and making it much easier to pair with the federal Low-Income Housing Tax Credit.

Modifies Tax Exempt Use Rules

• Makes the HTC easier to use by nonprofits such as community health centers, local arts centers, affordable housing, homeless services, museums, theaters, and others by eliminating Tax Code restrictions that make it challenging for nonprofits to partner with developers.

Increases the credit for smaller projects:

• Projects below $3.75 million will receive a 30% credit.
• Rural projects below $5 million will receive a 30% credit. (Rural Definition: Cities/towns with populations less than 50,000 and not contiguous and adjacent to cities/towns of 50,000 in population).
• All small projects are eligible for direct transfer, without need of a partnership-style investment.

About the federal historic tax credit

For more than four 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 America’s historic buildings. Since 1981, the HTC has leveraged $235 billion in private investment (inflation adjusted-2022 dollars), created more than 3.2 million jobs, and preserved more than 49,000 historic buildings that form the fabric of our nation.