Community Restoration and Revitalization Act Reintroduced with Proposed Amendments to Federal Rehab Tax Credit
Contributed By: The National Trust for Historic Preservation's Department of Public Policy
Rep. Allyson Schwartz (D-PA) introduced a revamped version of the “Community Restoration and Revitalization Act” (CRRA) that proposes to significantly expand the scope of the existing federal rehabilitation tax credit for older and historic buildings on October 1st. The CRRA will generally make it easier to use the rehab tax credits for smaller rehab projects and moderate rehabilitation; rehabilitate commercial structures for use as residential rental property; lease rehabilitated property to tax-exempt entities; establish a common definition of older buildings; fund and incentivize energy-efficiency retrofits of historic properties; allow the transferability of credits to another taxpayer; and, use the federal rehab credits in combination with state historic tax credits.
The new bill proposes eight specific amendments to the existing rehabilitation tax credit that would do the following:
- Increase the historic tax credit from 20 to 30 percent for “small projects” with $5 million or less in qualified rehabilitation expenditures.
- Permit the 10 percent non-historic credit for older buildings to be used for rehabilitating residential rental property.
- Establish and use a common definition of an older building as one that is at least 50-years-old in determining eligibility for the 10 percent non-historic credit.
- Allow for certain leasing arrangements with non-profits and other taxexempt entities that are now precluded under current law.
- Allowing building owners who are in the process of rehabilitation historic buildings to achieve substantial energy savings through energyefficiency retrofits by allowing graduated increases in the historic credit based on a scale of energy efficiencies achieved.
- Allow for the transfer of historic tax credits to another taxpayer for projects under $5 million in qualified rehabilitation costs.
- Allow for moderate rehabilitation by reducing by half the “substantial rehabilitation” test requirements under current law.
- Specify that state historic tax credits should not be considered as federal income for tax purposes or trigger any recapture of income.
For more specifics on these individual amendments, please visit http://www.preservationnation.org/issues/rehabilitation-tax-credits/federal/proposed-amendments.html.
Keywords: Community Restoration and Revitalization Act, National Trust for Historic Preservation, federal rehabilitation tax credit, fund and incentivize energy-efficiency retrofits of historic properties
Posted: October 6, 2009
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