Vermont Historic Property Tax Credits
Yes, Vermont offers state tax credits for rehabilitating historic properties through the Downtown and Village Center Tax Credit program. These credits can provide significant financial incentives for property owners looking to restore historic buildings.
Key Features of Vermont’s Historic Rehabilitation Tax Credits:
- Up to 10% credit for qualified rehabilitation expenses
- Additional 25% credit for facade improvements
- 50% credit available for code improvements
- Annual allocation of approximately $2.7 million in credits
- Properties must be listed in designated downtown or village center districts
- Building must be listed on National Register of Historic Places or eligible for listing
Application Process:
- Applications accepted annually by July 1st
- Review by Downtown Development Board
- Credits awarded in August
- Projects must be completed within 3 years
Frequently Asked Questions
Q: Can credits be combined with federal historic tax credits?
A: Yes, Vermont credits can be used alongside the 20% federal historic rehabilitation tax credit.
Q: What types of properties qualify?
A: Income-producing historic buildings located in designated downtown or village center districts.
Q: Is there a minimum investment requirement?
A: Yes, projects must meet IRS substantial rehabilitation test of $5,000 or the adjusted basis of the building.
Q: Are the credits transferable?
A: Yes, credits can be sold to banks or other investors to raise project capital.
Q: How long do I have to complete the rehabilitation?
A: Projects must be completed within 3 years of credit award.
Q: What expenses qualify?
A: Most construction costs for building rehabilitation, including plumbing, electrical, HVAC, and structural repairs.
Q: Can residential properties qualify?
A: Single-family homes do not qualify unless they are being converted to income-producing use.
The Bottom Line
Vermont’s historic rehabilitation tax credits can provide substantial financial assistance for qualifying commercial property rehabilitation projects. Combined with federal credits, they can offset up to 35% of eligible project costs. However, the application process is competitive and properties must meet specific location and historic designation requirements.