Governor Signs Expanded Historic Preservation Tax Credit
On July 29, Governor David Paterson signed legislation expanding the state’s Historic Preservation Tax Credit program. The legislation improves the existing, but underutilized, tax credits and will help municipal redevelopment and economic stimulus goals throughout New York State.
An economic impact study recently conducted by HR&A Advisors projects that the expanded credits will spur more than $500 million in economic activity in the State and create some 2,000 jobs in a five-year period.
The Landmarks Conservancy has been part of a broad coalition working for these expanded credits. We are grateful to the Preservation League of New York State, especially Daniel McKay, for their leadership on this issue. Our thanks to Governor Paterson for signing this bill and to both houses of the Legislature.
Tax credits have proven to be a significant stimulus to economic development and neighborhood renewal in the many other states with similar programs.
The new law improves on the existing legislation by extending the benefits to more building owners and by increasing the allowable tax credit. In New York City, owners of historic properties in many more neighborhoods will be able to receive tax credits when they restore their historic buildings. The enhancements signed by Governor Paterson will provide the following tax incentives for qualified historic properties:
- Gradually increase over five years the cap on the commercial credit value from $100,000 to $5 million and the residential credit value from $25,000 to $50,000;
- Target the credit in “distressed” areas — those located within a Census tract identified at or below one hundred percent of the median family income;
- Increase the share of qualified rehabilitation costs that commercial property owners can claim for the credit from 6 percent to 20 percent; and
- Offer the Preservation Tax Credit as a rebate for lower income homeowners to provide them with a stronger financial incentive with relatively smaller tax liability.
The program will apply to taxable years beginning January 1, 2010, and will sunset in five years on December 31, 2014.
