Historic buildings are tangible links with the past. They help give a community a sense of identity, stability and orientation. The Federal government encourages the preservation of historic buildings through various means. One of these is the program of Federal tax incentives to support the rehabilitation of historic and older buildings. The Federal Historic Preservation Tax Incentives program is one of the Federal government's most successful and cost-effective community revitalization programs. The Preservation Tax Incentives reward private investment in rehabilitating historic properties such as offices, rental housing and retail stores.
Eligibility Requirements to Receive Tax Credits
State Tax CreditEligible Properties
- More than 50 years old and historically designated
- On the State Register of Historic Places or is a designated Landmark in Longmont
Eligible Tax Payers
- Property owner(s) not planning to sell the property within five years, or
- Tenant with lease of five or more years
- Project must involve physical preservation, restoration or rehabilitation and must preserve the historic character of the property.
- Project must meet the Secretary of Interior's Standards for Rehabilitation. These standards can be found by calling the Longmont Planning Division, (303) 651-8330 or online at Historic Preservation Services.
- Rehabilitation costs must be more than $5,000.
- Projects must be completed within 24 months.
- Projects must receive approval prior to beginning work.
Extent of Tax Savings
- Available credit is 20 percent of rehabilitation costs up to a $50,000 maximum credit per qualified property.
- Credit directly reduces (dollar for dollar) income taxes owed to the state.
- Available credit can be carried forward for five years.
- For any tax year, reduction in taxes is limited to $2,000 plus 50 percent of the remaining taxes owned that year.
Federal Tax Credit
- Additional 20 percent federal tax credit, for the substantial rehabilitation of historic buildings utilized for income-producing purposes (including rental properties).
- Ten percent federal tax credit for the substantial rehabilitation of non-residential buildings, not eligible for designation but located within a designated historic district.
- These are in addition to the 20 percent State Tax Credit.
- Refer to the Federal Historic Preservation Tax Incentives program.
Procedure for Applying for a Tax Credit
- Find out if your property is historically designated by calling the Longmont Planning and Development Services Division at (303) 651-8330 or email the Planning and Development Services Division.
- Apply for preliminary approval by submitting the Application for Preliminary Approval (Part 1), rehabilitation plans, photographs of the property, and the application fee. The check must be made out to the City of Longmont with Certified Local Government (CLG) Historic Tax Credit Application Fee written in the memo field. DO NOT begin work until you have received preliminary approval.
- Upon receiving preliminary approval, begin work.
- Complete work within 24 months of the date preliminary approval was granted.
- Within 60 days of completion of work, submit application for approval of completed work along with photographs and any additional fees to the appropriate reviewing entity, the City of Longmont or the Colorado Historical Society (CHS).
- The City of Longmont or the Colorado Historical Society verifies that: the completed work conforms to approved plans; the completed work was done in the appropriate period of time; and that the completed work preserves and maintains the historic qualities of the property.
- The Historic Preservation Commission issues a verification form which is retained by the taxpayer.
- Taxpayer submits verification form with tax return being filed for the year in which the work is completed.
Allowable Costs When Applying for a Tax Credit
- "Hard costs" associated with the physical preservation of a historic property - demolition, carpentry, gypsum wallboard (Sheetrock), plaster, painting, ceilings, doors, windows, fire sprinkler systems, roofing, flashing, exterior repair, cleaning, tuck pointing, cleanup, etc.
- Improvements undertaken due to normal wear and tear. Routine or periodic maintenance - cleaning, routine painting, minor repairs, general periodic upkeep, redecorating or any purely cosmetic change that is not part of an overall rehabilitation or that does not enhance the property's historic character.
- "Soft costs" - fees related to appraisals, architectural, engineering, interior design, legal, accounting, realtor, loan, sales and marketing, closing, building permit, use and inspection, project signs, phone, temporary power, bind bonds, copying, rent, etc.
- Acquisition costs.
- New additions or enlargements (except as may be required to comply with building safety codes).
- Excavation, grading, paving, landscaping or site work.
- Repairs to additions made to a historic property after the property was officially designated.
Tax Credit Application Fees
- $250 application fee for projects costing less than $15,000
- $500 application fee for projects costing $15,000 - $50,000
- $750 application fee for projects costing $50,001 - $100,000
- $1,000 application fee for projects costing over $100,001
Additional Funding Sources for Historic Preservation Projects
There are many other sources of funding for historic preservation and restoration projects, including State Historic Fund Grants, Landmark Rehabilitation 0% Interest Loans, Historic Structure Assessment Grants, and Colorado Historical Foundation Loans, plus numerous private foundation grants and loans. Visit History Colorado's Grant information pages to find out more!