Historic Renovations

Love old properties? If you do, you're in good company -Consider these facts: According to the National Register of Historic Places in North Carolina, over 70,000 listings of historic buildings, structures, sites, objects, and districts exist across the United States and its territories, with over 2,100 of these in North Carolina.

Of the 2,100 listings in our state, roughly 300 are historic districts - neighborhoods, commercial areas, prehistoric and historic archaeological areas, industrial complexes, mill villages, and rural farming areas - with some of these including several hundred contributing historic buildings or sites. So has the point been made? You're one of many if you love old properties!

In response to the outpouring of interest in the rehabilitation of historic properties, the Federal Historic Rehabilitation Investment Tax Credit was initiated in 1976. Today this incentive provides a dollar-for-dollar reduction of federal income tax owed equal to 20% of the cost of rehabilitating income-producing -certified historic structures. Projects must go through a three-part "Historic Preservation Certification Application" process at the state and federal levels, via the State Historic Preservation Office and the Secretary of the Interior/National Service. Buildings listed in the www.hpo.dcr.state.nc.us/nrhome.htm  National Register of Historic Places are potentially eligible for this credit, and buildings located in a "registered historic district" or an area that contributes to the significance of the registered historic district are also potentially eligible.

In order to qualify for the credit, buildings must be substantially rehabilitated, in a manner consistent with the historic character of the building and with the district in which the building is located (where applicable), and they must meet The Secretary of the Interior's Standards for Rehabilitation. For information on these standards, visit www.hpo.dcr.state.nc.us/standard.htm.

For qualifying projects, the federal tax credit includes expenses related to rehabilitation costs, construction interest and taxes, architectural and engineering fees, legal and professional fees, developer's fees, and general and administrative costs. It does not include acquisition costs, enlargement costs, acquisition interest and taxes, REALTOR fees, paving and landscaping costs, sales and marketing costs, or new building construction costs.

For easy-to-read answers to frequently asked questions regarding the Federal Historic Rehabilitation Investment Tax Credit, visit www.hpo.dcr.state.nc.us/tafaq.htm In addition to the federal tax credit, North Carolina contributes a 20% credit to those taxpayers who receive the federal credit for income-producing historic properties, providing a combined 40% credit against eligible project costs. North Carolina also gives a 30% credit for the rehabilitation of non-income-producing historic properties, which includes private residences. No equivalent federal credit exists for non-income-producing historic rehabilitations. Over the past 30 years, the North Carolina State Historic Preservation Office has invested over $500,000,000 in historic properties.

Unlike the federal credit, in order to receive the state credit, a non-income-producing property must be a "certified historic structure" at the time the credit is taken, meaning it must be listed in the National Register individually or as part of a district. The federal tax credit for income-producing properties provides for "preliminary certification," enabling an owner to take the credit for a qualifying rehabilitation before the structure is actually listed in the National Register of Historic Places. The state credit does not provide for preliminary certification for non-income-producing historic structures.

On the other hand, according to the North Carolina State Historic Preservation Office (www.hpo.dcr.state.nc.us/credits.htm ), "an owner may begin a rehabilitation project on a non-income-producing property following approval of rehabilitation plans by the State Historic Preservation Office but prior to the listing of the property in the National Register, with the intention of having it listed in the Register by the time is project is completed. However, because listing of a property by a desired deadline cannot be guaranteed, owners are strongly advised to secure National Register listing of their non-income producing property prior to beginning a certified rehabilitation."

So how does one list a property in the National Register of Historic Places -  (Approximately 85% of North Carolina's 2,100 properties listed in the National Register are privately owned, so it can't be terribly, terribly difficult!) A nomination is submitted in accordance with detailed state and federal guidelines. A list of private consultants skilled in writing nominations is available through the State Historic Preservation Office. The State Historic Preservation Office makes sure nominations are complete and accurate, then forwards them to the federal Keeper of the National Register in Washington, D.C., the final authority on National Register listings. The nomination process typically takes at least six months, and could take longer, depending on the variables of the property requesting the listing.

Guidelines and additional information on North Carolina Historic Preservation State Tax Credits are found at www.hpo.dcr.state.nc.us/credits.htm. Applications may be obtained through the Restoration Branch of the North Carolina State Historic Preservation Office by calling (919) 733-6547. The Restoration Branch staff provides technical restoration consultation services to typically more than 2,000 historic property owners in any given year. Information regarding the requirements and procedures for listing properties in the National Register of Historic Places may be obtained by calling the Survey and Planning Branch of the North Carolina State Historic Preservation Office at (919) 733-6545 or by visiting www.hpo.dcr.state.nc.us/criteria.htm

As you can see, if you love old properties and you're interested in renovation, you have a wealth of information at your fingertips, especially in regards to tax breaks. It may seem a bit overwhelming at first, but property owners who've been through the process will tell you it's worth it. So roll your sleeves up and get started -  Just think of the pride you?ll feel in seeing your property listed on the National Register of Historic Places!

For more information on the preservation of historic homes, visit the following websites:

The National Trust for Historic Preservation
www.nationaltrust.org

Resources for Historic Properties
www.historicproperties.com  

Historic Preservation Resource
www.preservationdirectory.com  

Resources for Historic Home Lovers
www.oldhouses.com  

North Carolina State Historic Preservation Office
www.hpo.dcr.state.nc.us/bibliog.htm  

Historic Preservation Tax Credits in North Carolina
www.hpo.dcr.state.nc.us/tchome.htm
www.hpo.dcr.state.nc.us/credits.htm
www.hpo.dcr.state.nc.us/ta90nc.htm
www.hpo.dcr.state.nc.us/tafaq.htm
www.hpo.dcr.state.nc.us/standard.htm

Preservation North Carolina
www.presnc.org
www.presnc.org/learnmore/relatedsites.html

Capital Area Preservation
www.cappresinc.org  

The Preservation Society of Chapel Hill
www.chapelhillpreservation.com  

Historic Preservation Society of Durham
www.preservationdurham.org  

The Alliance for Historic Hillsborough
www.historichillsborough.org

Raleigh, A National Register of Historic Places
www.cr.nps.gov/nr/travel/raleigh/preservation.htm  

Rebecca R. newsome is a freelance writer