This bill enhances tax credits for rehabilitating historic buildings in rural America by increasing the credit rate from the standard amount to 30 percent for most projects and 40 percent for affordable housing projects in areas outside cities with populations over 50,000. The legislation allows property owners to transfer these credits to other taxpayers, similar to recent broader tax credit transfer provisions, which could help smaller rural developers and nonprofits access financing for historic preservation projects. Projects are capped at $5 million in eligible rehabilitation expenses, and affordable housing projects must ensure at least 50 percent of the building contains affordable units or dedicate at least 33 percent to affordable housing. The bill includes a recapture provision requiring projects claiming the higher affordable housing credit to maintain affordability standards, with a 45-day cure period if violations are discovered. The enhanced credits apply to properties placed in service after December 31, 2025, and the bill also removes certain basis adjustments that previously reduced the value of the credit, making the incentive more valuable to rural property owners undertaking historic preservation.
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