State historic tax credit programs

Virginia Rehabilitation Tax Credit Program

Program overview:

The Virginia Rehabilitation Tax Credit for income-producing properties is designed to work with or independent of the federal historic tax credit and provides a 25 percent credit for qualified rehabilitation expenditures (QREs).

To qualify, a building must be a certified historic structure: either listed on the National Register of Historic Places (NRHP) or the Virginia Landmarks Register individually, as a contributing structure in a historic district, or eligible for listing.

Reconstruction and improvements must amount to at least 25 percent of the assessed value for owner-occupied buildings and at least 50 percent for non-owner-occupied buildings.

Program details:

  • Per-project cap: $5 million per taxpayer per year.
  • Carry forward: 10 years.
  • The credit may be claimed in the year the rehabilitation is complete.
  • The recapture is the same as the federal historic tax credit, except state doesn’t require ownership to remain the same for 5 years.
  • If rehabilitation expenses exceed $500,000, an audit report by a certified public accountant must be submitted; if rehabilitation expenses are less than $500,000, an agreed-upon procedures engagement report by a certified public accountant is required.
  • Sunset date: June 30, 2025.
  • Apply for the federal and state credits separately.

Who can use the credit?

The credit can be used by commercial and owner-occupied residential properties. The state credit for Virginia may not be sold or transferred, but the credits may be syndicated through limited partnerships.

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