Historic Homes Rehabilitation Tax Credit

Overview

The Historic Homes Rehabilitation Tax Credit program is designed to encourage new homeownership and to assist existing homeowners in maintaining or rehabilitating their property. The program provides a 30% tax credit, up to $30,000 per dwelling unit, for the rehabilitation of one to four family buildings. After completion of rehabilitation work, one unit must be owner-occupied for a period of five years.

Eligibility & Program Requirements

All applications and questions must be emailed to Erin.Fink@ct.gov  |  Our office will no longer accept paper/mailed applications. This program provides a 30% tax credit voucher on eligible rehabilitation expenditures that can be directly attributed to the long-term preservation of historic building fabric. 

How does the program work? View this quick guide and watch our tutorial videos: Video 1; Video 2; and Video 3

1. Eligible historic homeowners apply to the program using a Part 1 and Part 2 application. These applications ensure that the homeowner meets the following requirements: 

a. The historic home is listed either individually on the National or State Register of Historic Places, or as a contributing resource in a State or National Register of Historic Places District. 

i. Currently, you can search the SHPO database for the southern half of the state.
ii. You may contact SHPO for information on the northern half of the state. 

b. The historic home must contain between 1-4 housing units. Mixed-use properties are ineligible.
c. The owner must be a taxpayer filing a state of Connecticut tax return who possesses title to the historic home, or prospective title to an historic home in the form of a purchase agreement or option to purchase, or a nonprofit housing corporation that possesses such title or prospective title. For homeowners with a purchase agreement or option to purchase, they must possess title by the time the part 3 application is submitted.
d. The owner must spend a minimum of $15,000 in approved qualified rehabilitation expenses. The final total from all receipts must meet the minimum $15,000 requirement.
e. The rehabilitation work must meet the Program’s Standards for Rehabilitation.

2. Within 30 days or less, a State Historic Preservation Office (SHPO) Program Manager will review the scope of work, estimates for the work, and representative project photographs in the Part 1 and part 2 application. No work can begin without SHPO approval. Work that has already been completed is ineligible for the program. Projects are evaluated using the Program’s Standards for Rehabilitation, which state: 

  •  A property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. 
  • The historic character of a property shall be retained and preserved. The removal or alteration of features and spaces that characterize a property shall be avoided. 
  • Each property shall be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or architectural elements from other buildings, shall not be undertaken. 
  • Changes that have acquired historic significance in their own right shall be retained and preserved. 
  • Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a property shall be preserved. 
  • Deteriorated historic features shall be repaired rather than replaced. Where severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities, and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence. 
  • Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. 
  • Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken. 
  • New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment. 
  • New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired.

3. If the work is approved, the SHPO Program Manager will issue a tax credit reservation based on 30% of the total qualified rehabilitation expenditures. The SHPO Program Manager will also include a 10% contingency. The tax credit reservation is the amount of money set aside while the homeowner completes the project. The reservation amount may vary from the final voucher amount (see step 7 of the Quick Guide).

4. The homeowner begins the work. All work must be completed prior to the expiration date on the tax credit reservation (60 months from date of issuance)

5. The homeowner pays for the work in full. The homeowner collects receipts showing the work was paid for in full, takes completed project photographs, and copies any canceled checks.

6. The homeowner submits a part 3 application showing the finished work. 

7. Within 30 days or less, a SHPO Program Manager will review the application and calculate the final voucher amount. The final voucher is based upon 30% of the total receipts. By statute and program regulation there is no provision for increasing the amount of a tax credit reservation as a result of increased costs incurred. At the end of the project, the homeowner will earn the lesser of either the tax credit reservation or 30% of the project’s final qualified rehabilitation expenditures.  The final total from all receipts must meet the minimum $15,000 requirement.

8. The homeowner must complete a part 4 application to trigger the issuance of the tax credit voucher to the contributing taxpayer (a C-Corporation). 

9. The voucher can only be issued to and used by a C-Corporation. An owner can find a C-Corporation on their own or engage with a tax credit broker. 

  •  A C-Corporation is not obligated to purchase the voucher. 
  • SHPO is not obligated to facilitate the sale of the voucher.
  • There is no guarantee that every C-Corporation will purchase the voucher and/or purchase the voucher dollar-for-dollar. 

Eligible Expenditures: 
* Porch
* Steps (exterior)
* Doors (exterior and interior)
* Windows 
* Storm Windows
* Shutters
* Chimneys
* Roof
* Gutters/ downspouts
* Painting (exterior and interior)
* Carpentry (exterior and interior)
* Foundation
* Lightning protection
* Repointing
* Abatement of hazardous materials
* Structural repairs and stabilization
* Staircases
* Decorative ornamentation, moldings
* Paneling 
* Floors (existing wood floors, historic tiles)
* Millwork
* Plaster repairs
* Heating, Ventilating, Air Conditioning
* Plumbing
* Electrical wiring
* Fire suppression
* Basement
* Wells
* Septic system
* Geo-thermal system

Ineligible Expenditures:
* Replacement of historic building fabric unless it is in-kind and the feature is beyond repair
* New construction
* Changes to the historic floorplan
* Spray foam insulation
* New appliances or fixtures
* The owner’s personal labor
* The cost of site improvements, unless to provide building access to persons with disabilities
* Any cost associated with the rehabilitation of an outbuilding unless such building contributes to the historical significance of the historic home
* Any non-construction costs such as architectural fees, legal fees, and financing fees 
* Blinds, shades, lamps
* Landscaping, driveways, fences

There are 4 parts to the Historic Homes Rehabilitation Tax Credit application. 

Part 1: This application will determine that the home is historic and listed on either the State or National Register of Historic Places. Required attachments include: at least 4x6’’sized color photographs of the front, back and sides of the building, outbuildings, a street view, and any significant interior features such as staircases, fireplaces, or decorative ornamentation.

Part 2: This application will describe the proposed work. Required attachments include a budget, at least 2 representative color 4”x6’’ sized photographs per project/work item, contractor quotes, and necessary drawings or specifications. The reason for each project should be described and proposed work should be explained and itemized with associated costs from a contractor or expert.

According to Policy Statement #1 effective April 15, 2015, eligible applications must include a rehabilitation plan that proposes more than 65% of the total qualified rehabilitation expenditures for undertakings that can be directly attributed to the long-term preservation of historic building fabric and character defining features. The tax credit is calculated from the total qualified rehabilitation expenditures, not on the entire project cost.

The Part 1 and Part 2 applications can be submitted together.

Upon receiving a signed part 2 application, approval letter, and reservation certificate from the SHPO office, work can begin.

Part 2 Amendment: A new amendment must be used each time a work item is added, deleted or modified. Please note, there is no allowance for increasing the amount of the tax credit if additional work items exceed the original budget.

Part 3: This application will document the completed project. Required attachments include representative at least 4”x6’’ sized color photographs for each completed work item and cancelled checks or paid invoices that correspond to completed work items.

Upon receiving a signed part 3 application and approval letter, an owner can submit a new part 1 and 2 application for the next phase of work. 


Part 4: This application must be stamped by a public notary to certify that the owner will occupy the home for a five-year period, or convey the historic home to a new owner who will occupy the historic property during the five-year occupancy period required. The public notary will also attest that the owner is a State of Connecticut tax payer. 

  • Tax credits can only be used by a C Corporation with tax liability under Chapters 207-212 of the C.G.S.
  • The majority of the project must include work that preserves historic building fabric and/or character-defining features.  For more information, read this Policy Statement.

Application

Please note: While we review and respond to applications as quickly as possible, this program receives a high volume of applications. Therefore, please factor the mandated 30-day review period into your planning process.

All applications must be submitted electronically.   

Laws/Regulations

Contact

Erin Fink, Architectural Preservationist

T: 860.500.2426

E: erin.fink@ct.gov
Department of Economic and Community Development
State Historic Preservation Office
450 Columbus Blvd., Suite 5
Hartford, CT 06103