Historic Tax Incentive Programs

Historic Tax Incentives

Rehabilitating historic buildings:

  • promotes their reuse
  • stimulates private investment in rural areas and urban cores
  • boosts community pride

 

Historic tax incentives promote the reuse of historic buildings and stimulate private investment.

 

Owners of historic buildings in Nebraska have three tax incentive programs they could use when rehabilitating their buildings:

  • Federal Historic Tax Credit
  • Nebraska Historic Tax Credit
  • Valuation Incentive Program

 

Each program is similar. You may be able to use more than one program for your building’s rehabilitation.

A National Park Service program for a 20% credit on your federal income tax when you rehabilitate your historic building.

 

Has a 3-part application process:

Part 1: Evaluation of Significance

Part 2: Description of Rehabilitation

Part 3: Request for Certification of Completed Work

Amendment

 

Is your building eligible?

 

Is it eligible for listing on the National Register of Historic Places? Or is it locally landmarked in your town?

 

Will it produce income? Is it a business? Or is it a rental property?

 

Will you substantially rehabilitate your building?

 

Are you interested? Contact us!

The Nebraska State Historic Tax Credit (NHTC) was initiated in 2015 under the Nebraska Job Creation and Main Street Redevelopment Act.  The NHTC provides a state tax credit of up to 20% of qualified rehabilitation expenditures.  Annually, $15 million is allocated by the Nebraska Legislature on the first day of the calendar year.  Individual projects are capped at $1 million.  The availability of the NHTC has encouraged investment in historic resources in rural communities and urban cores throughout Nebraska.Provides a state tax credit of up to 20% of qualified rehabilitation expenditures.

This guidance document is advisory in nature but is binding on the Nebraska State Historical Society until amended by such agency. A guidance document does not include internal procedural documents that only affect the internal operations of the agency and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

The NHTC program consists of a 5-part application process. The Nebraska State Historical Society reviews parts 1-3. The Nebraska Department of Revenue approves parts 4 and 5.

 

Requirements:

  • A NHTC Part 2 application must be submitted prior to the commencement of work
  • Buildings must be a historically significant real property at the time of final approval. The building must be:
    • Individually listed on the National Register.
    • A contributing resource in a historic district listed on the National Register.
    • Individually designated pursuant a landmark ordinance enacted by a political subdivision.
    • Located within a district designated pursuant a landmark ordinance enacted by a political subdivision.
  • Private single family detached residences do not qualify for the NHTC program.
  • Project expenses must exceed $25,000. Properties in Omaha and Lincoln must exceed $25,000 or 25% of the property's assessed value. Whichever is greater.
  • All work must meet the Secretary of Interior's Standards for Rehabilitation. This will be determined by the NeSHPO during the review process.

 

Before You Apply:      

Applicants apply online via the NHTC website application. Please read the NHTC online application instructions before applying. In addition, applicants are encouraged to consult early and often with the NeSHPO in the planning stages of the project.

 

Part 1 - Historic Structure Certification:

The NHTC Part 1 determines the subject property as a historically significant real property for the purpose of the program.  All online applications require a completed Part 1 application, including properties individually listed on the National Register.

Required Materials (except for properties individually listed on the National Register)

  • A narrative description and statement of significance.
  • Exterior photos documenting each elevation and interior photos of significant spaces. All photos must follow the digital photograph guidelines found at the application instructions.
  • A PDF photo site key which follows the digital photograph guidelines found in the application instructions.
  • A PDF map with the subject property clearly labeled.
  • A PDF of the Certified Local Ordinance designation (if applicable).

 

Part 2 - Qualified Rehabilitation Approval

The NHTC Part 2 determines if the proposed rehabilitation will meet the Secretary of the Interior's Standards, and will thus qualify for an allocation of credits.

Upon submission of a Part 2 application, the applicant will need to pay a Part 2 application fee. This fee is 0.8% of the total credits requested, and must be paid prior to the review of a Part 2 application. The web application will auto generate an invoice upon completion of the Part 2 application. The Part 2 application is considered incomplete until the application fee is paid. Applicants can pay their application fee via credit card by calling 402.471.0090 or 402.471.6075, or by mailing in a check to Nebraska State Historical Society, PO Box 82554, Lincoln, Nebraska 68501-2554.

Once you have an approved Part 2 on file with the NeSHPO, any changes to the proposed scope of work must be submitted for approval via an amendment  before those changes are implemented.

Required Materials:

  • Narrative description of existing conditions and proposed work.
  • A set of interior and exterior photographs which follow the digital guidelines found in the application instructions
  • A PDF photo site key which follows the digital photograph guidelines found in the application instructions
  • A PDF copy of a map with the subject property clearly labeled
  • A PDF copy of architectural drawings or plans, scaled to fit on 11' x 17" paper
  • A completed cost estimate form
  • A PDF copy of the property's current property tax statement or property record card.

 

Part 3 - Completed Rehabilitation Approval

An NHTC Part 3 must be submitted within 12 months of the building being placed in service.  If the Part 3 is not submitted within 12 months, the project will not be issued a credit.  The NHTC Part 3 application determines if all the completed work on the subject property conforms to the Secretary of the Interior's Standards. The Part 3 application becomes available only after the NeSHPO approves a complete Part 2 application. The applicant must submit a complete Part 3 application within 12 months of when all approved work is complete and the subject property is placed into service. Once a Part 3 application is approved, the applicant may begin the process with the Department of Revenue to verify eligible expenses and to calculate, distribute, and use the allocated tax credits.

Upon submission of a Part 3 application, the applicant will need to pay a Part 3 application fee. This fee is 0.2% of the total credits requested. The web application will auto generate an invoice upon completion of the Part 3 application. The Part 3 application is considered incomplete until the application fee is paid. Applicants can pay their application fee via credit card by calling 402.471.0090 or 402.471.6075, or by mailing in a check to Nebraska State Historical Society, PO Box 82554, Lincoln, Nebraska 68501-2554.

After the NeSHPO has reviewed and approved the NHTC Part 3, the Nebraska Department of Revenue (NDR) will review and certify the project expenses. The applicant will have to submit a Part 4 and Part 5 application along with a Schedule I and II to NDR.

 

For further information regarding the NHTC, please contact;

 

Ryan Reed

Tax Credit Coordinator

Nebraska State Historic Preservation Office

402-471-4788

ryan.reed@nebraska.gov

 

Freezes your assessed property evaluation for eight years after you’ve rehabilitated your building. Your property taxes increase by 25% each year for four years after the initial eight years. Your county will assess your building at its full value after twelve years. We call it a long-term savings plan.

 

Your property must be listed on the National Register of Historic Places before your project begins.

 

Has a 3-part application process. Use these instructions when completing the application.

 

Is your building eligible?

 

Is it listed on the National Register of Historic Places? Or is it locally landmarked in your town?

 

Is your property taxable?

 

Will the cost of your building’s rehabilitation be 25% or greater than your property’s assessed value?

 

Will you complete your project during a 2-year period?

 

Are you interested? Contact us.

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