This historic school building in Oakland, California,
was rehabilitated for use as a medical facility. Photo:
What are the basic requirements that determine
whether a project will be eligible for the 20% tax credit?
There are 4 factors that can help you decide whether
your rehabilitation project proposal would meet the basic application
requirements for the 20% tax credit.
1. The historic building must be listed
in the National Register of Historic Places or be certified as contributing to the significance of a "registered historic district."
2. After rehabilitation, the historic building must be used for
an income-producing purpose for at least five years. Owner-occupied
residential properties do not qualify for the federal rehabilitation
3. The project must meet the "substantial rehabilitation test."
In brief, this means that the cost of rehabilitation must exceed
the pre-rehabilitation cost of the building. Generally, this test
must be met within two years or within five years for a project completed in multiple phases.
4. The rehabilitation work must be done according to the Secretary
of the Interior's Standards for Rehabilitation. These are ten principles
that, when followed, ensure the historic character of the building
has been preserved in the rehabilitation.