Historic house attracts many people for the character they hold. These houses can be expensive to buy, but you will get lots of tax benefits for owning one. Different tax incentives are present in local, state and federal levels to encourage people to buy such properties.
Every year, your historic house will gain market value. As the appraised value of your house increases, your taxes will increase. You can work with your local historical preservation office or any historical society and try to freeze on property tax increases. Freezes last for 10 to 15 years depending on your plan to renovate it or keeping the historical character of the property unaltered.
10% rehabilitation credit
If your property was built before 1936 then you can get additional tax credits. If your house was renovated before 1936 then you can apply for a 10% back on the cost of renovations. So, for example, if you spent $100,000 to renovate a house for a business that was built in 1935 then you will get $10,000 in tax credits.
An easement is an agreement between a property owner and a historical preservation society representative. You get excellent benefits for maintaining the property’s historic character. You can get it in the form of a reduction in property tax or income tax. You can get this benefit forever. It is filed as a deed with the property title and is passed down to the future owners.
State tax credit
There are many states in the U.S who have adopted tax credits for historic building renovations then you can get tax incentives. You can find many historic buildings in traditional economic centers like downtowns. Renovating a house there can help in renovating the neighborhood, so the state actually supports that and gives you incentives. While federal tax incentives are limited to businesses, state tax incentives are not. So, you can get state tax incentive by renovating your own house.
There are some private philanthropic organizations who are dedicated to preserving historic properties. They can give you grants for renovations or preservation. Preservation is a philanthropic activity for many businesses. For example, the American Express Partners offer grants for renovation of historic buildings.
These incentives can equal a very large amount; so, it’s worth buying a historic house. You get the attention, the satisfaction and tax savings by buying historic houses. Before you buy a historic house you must check out with your local historical society to find out what kind of benefits you can get, so that you don’t miss out.