Tax Incentives
Historic Tax Incentive Programs
Historic Tax Credit Programs are some of the most impactful tools Nebraskans have in promoting the economic revitalization of their communities. These programs provide tax credits for property owners who rehabilitate a historic building while retaining its historic character. Past projects have provided much-needed low-income housing, fixed-up public buildings like courthouses, and made downtown areas more attractive to small business owners. Tax credit programs also stimulate local economies by generating skilled jobs and local tax revenue.
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Three Tax Credit Programs
1. The Nebraska Historic Tax Credit: Provides a state tax credit of up to 20% of qualified rehabilitation expenditures
2. The Federal Historic Tax Credit: Provides a Federal income tax credit for 20% of qualifying rehabilitation projects
3. The Valuation Incentive Program (VIP): Freezes the assessed value of an approved property at the prehab value for 8 years. After 8 years, the assessed value gradually increases over 4 years until the current accessed value is reached
2. The Federal Historic Tax Credit: Provides a Federal income tax credit for 20% of qualifying rehabilitation projects
3. The Valuation Incentive Program (VIP): Freezes the assessed value of an approved property at the prehab value for 8 years. After 8 years, the assessed value gradually increases over 4 years until the current accessed value is reached
Each program is similar and you may be able to use more than one program for a rehabilitation project.
Click on the images below for more detailed information about each program. You can also watch a presentation about the three programs on YouTube.
Nebraska Historic Tax Credit
Nebraska Historic Tax Credit
Federal Historic Tax Credit
Federal Historic Tax Credit
Valuation Incentive Program
Valuation Incentive Program
Resources for Owners of Historic Properties
Hiring someone with a proven-record in historic preservation is especially important when the project is using historic tax incentives. We encourage property-owners to consider the special skills required for the successful rehabilitation of a historic building.
The companies/individuals in this directory have requested or consented to be placed on this list. The Nebraska State Historic Preservation Office is not endorsing any of these individuals or companies. We strongly recommend checking references, reviewing previous projects, and conducting careful interviews of prospective providers.
Download the Directory of Craftspeople with Experience in Historic Preservation
Historic Tax Credit Success Story
Historic tax credits made it possible for Cohen-Esrey, a real-estate development company, to convert the abandoned Hastings Brewery building into modern apartments with unique historic features. Tim Quigley of Cohen-Esrey describes this tax-credit project as a “win-win for the community, revitalizing the east side of downtown Hastings. It provided much needed affordable housing while preserving a historic building that was sentimental.” The building, now called the Brewery Lofts, has a waiting list of interested apartment seekers.
FAQ's
What are my first steps?
Contact the Nebraska State Historic Preservation Office (NeSHPO) to learn more about the eligibility of your project. Also, check out the instructions for the Federal Historic Tax Credit, the Nebraska Historic Tax Credit, and the Valuation Incentive Program (VIP). Also, check out this how-to guide on Planning Successful Rehabilitation Projects.
What is the difference between the federal and state tax credit programs?
The rehabilitation standards and required information are the same. We encourage you to fill out both applications. Each program has its own paperwork, however, the NHTC application is entirely online while the Federal application and VIP application must be typed, printed, and then mailed. Please reference our online comparison chart for differences in eligibility and other financial details.
Does work done on my house qualify for tax credits?
Yes and No. The Valuation Incentive Program (VIP) can be used on your personal home. However, single-family detached residences are not eligible for the Federal and State Historic Tax Credit.
What expenditures qualify for tax credits?
Most pre-approved work on the interior and exterior qualifies. Landscaping, furnishings, additions, and moveable equipment do not qualify. For more information on what qualifies, visit the IRS website.
Can I replace the windows?
It depends, the Nebraska State Historic Preservation Office (NeSHPO) will assess whether or not the existing windows are either beyond repair or ahistorical. If the NeSHPO determines that the windows can be replaced, the replacement windows must match the old in design, color, texture and other visual qualities.
What happens if I make changes to my project during construction?
You must submit an amendment form to the Nebraska State Historic Preservation Office (NeSHPO) for review.
I am interested in participating in a tax credit project for a building that I do not yet own, can I still start the application process?
Yes, you can start and submit Part I with the written consent of the current property owner.
Can I apply for a tax credit after completing a project?
No. An application must be submitted prior to starting work on your property.
Are the tax incentives transferable?
Yes and No. The Nebraska Historic Tax Credit can be sold to a third party of a financial institution (this is potentially a great option for interested non-profits). The Federal Historic Tax Credit is not transferable. Please see the Nebraska Department of Revenue website for more details.
Will all work be reviewed on the project?
Yes, all work on the interior and exterior of the property will be reviewed using the Secretary of Interior Standards. Even work that does not count an eligible expenditure, will be reviewed.
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