Historic Preservation Investment Tax Credit

Rhode Island's state tax credit for rehabilitation of historic income-producing buildings is one of the most innovative in the nation, and has generated over $485 million in new private investment. Buildings that are listed on the National Register of Historic Places or which are located within a National Register Historic District (and contribute to the district's significance, or if it is part of a local historic district) are eligible.

The credit equals 30% of the cost of approved rehabilitation work. Exterior and interior rehab qualifies for the tax credit as long as the work meets the Secretary of the Interior's Standards for Rehabilitating Historic Properties. Eligible projects include work on the roof, exterior walls, windows, foundations, structure, heating, plumbing, electrical system, and interior improvements that are capitalized to the building. In order to qualify, the project must cost at least half the value of the building (50% of adjusted basis). The entire credit may be claimed when the project is completed.

The state tax credits may be combined with federal tax credits for historic preservation and affordable housing. Unused portions of the credit may be taken over a 10-year period. Also, the owner does not have to use the credit him/herself, but instead can sell the credit to another individual or to a corporation. Non-profit owners can qualify for the credit and assign or sell it to a tax-paying partner or investor.

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