This bill makes several changes to the federal historic rehabilitation tax credit, which helps property owners offset the cost of restoring older buildings. The main changes include allowing property owners to claim the full 20 percent tax credit in the year a building is placed back in service rather than spreading it over multiple years, and creating a new 30 percent credit for smaller historic rehabilitation projects (up to $3.75 million in costs, or $5 million in rural areas). The bill also allows these smaller projects to transfer unused tax credits to other taxpayers, removes certain tax basis adjustments that reduced the credit's value, and modifies rules for properties leased to government entities. Most provisions apply to buildings placed in service after the bill's enactment, while the full-credit-in-one-year change applies to buildings placed in service after December 31, 2023. The bill aims to make historic preservation more financially attractive and accessible to property owners, particularly in rural communities and for smaller restoration projects.
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