Federal Historic Preservation Tax Credit

The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation's most successful and cost-effective community revitalization programs. It has leveraged over $84 billion in private investment to preserve 42,293 historic properties since 1976. The National Park Service and the Internal Revenue Service administer the program in partnership here in Maine with the Maine Historic Preservation Commission, our State Historic Preservation Office.

20% Tax Credit

A 20% income tax credit is available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures.” The Maine Historic Preservation Commission and the National Park Service review the rehabilitation work to ensure that it complies with the Secretary’s Standards for Rehabilitation. The Internal Revenue Service defines qualified rehabilitation expenses on which the credit may be taken. Owner-occupied residential properties do not qualify for the federal rehabilitation tax credit. Learn more about this credit before you apply.

Each year, the National Park Service's Technical Preservation Services approves approximately 1200 projects, leveraging nearly $6 billion annually in private investment in the rehabilitation of historic buildings across the country. Learn more about this credit: Historic Preservation Tax Incentives.

Federal Tax Credit Basics

  • The amount of credit available under this program equals 20% of the qualifying expenses of your rehabilitation.
  • The tax credit is only available to properties that will be used for a business or other income–producing purpose, and a "substantial" amount must be spent rehabilitating the historic building.
  • Your building needs to be certified as a historic  structure by the National Park Service.
  • Rehabilitation work has to meet the Secretary of the Interior’s Standards for Rehabilitation, as determined by the National Park Service.

Before applying, consult your accountant or tax advisor to make sure that this federal tax credit is beneficial to you. Certain income and other restrictions may have a bearing on whether an owner is able to use the credit. IRS administers the Department of the Treasury’s involvement with the Federal Historic Preservation Tax Incentives Program. The IRS has provided written guidance on these complex federal regulations which is available as easy-to-read guidance in IRS Info.

Partnership Program

The tax incentives program is administered by the National Park Service (NPS) and the Internal Revenue Service (IRS) in partnership with the State Historic Preservation Office. Each plays a specific role:

Maine Historic Preservation Commission

  • Serve as first point of contact for property owners.
  • Provide application forms, regulations, information on appropriate treatments, and technical assistance.
  • Maintain records of buildings and districts listed in the National Register of Historic Places, as well as state and local certified historic districts.
  • Assist anyone wishing to list a building or a district in the National Register of Historic Places.
  • Advise applicants on rehabilitation projects and make site visits.
  • Make certification recommendations to the National Park Service.

 National Park Service

  • Reviews applications for conformance with the Secretary of the Interior’s Standards for Rehabilitation.
  • Issues certification decisions in writing.
  • Transmits copies of all decisions to the IRS.
  • Publishes program regulations, the Secretary of the Interior’s Standards for Rehabilitation, the Historic Preservation Certificat ion Application, and information on rehabilitation treatments.

Internal Revenue Service

  • Publishes regulations on qualified rehabilitation expenses, time periods for incurring expenses, and all other financial matters concerning the 20% tax credit.
  • Answers inquiries on financial aspects of the program, and publishes an audit guide to assist owners.
  • Audits taxpayers to ensure that only parties eligible for the 20% tax credits use them.


On March 31, 2008, Democratic Governor Baldacci signed a bill approved nearly unanimously by the Democratic-controlled legislature that fundamentally changed the state tax credit. Among the changes were a significantly increased credit cap, the creation of a small projects provision for taxpayers who do not claim the federal tax credit but who could claim the state credit, and the inclusion of an added incentive for the creation of affordable housing.

In 2011, Republican Governor Paul LePage signed an extension of the bill passed nearly unanimously by the Republican-controlled legislature.

The Maine Historic Preservation Commission administers the program in consultation with the Department of Administrative and Financial Services, Bureau of Revenue Services. The Commission strongly recommends that prospective applicants carefully review the program rules prior to submitting applications or commencing work.

Maine's State Historic Rehabilitation Tax Credit Program includes the following features:

1.   The "Substantial Rehabilitation Credit". A 25% state credit for any rehabilitation that also qualifies for the 20% federal credit. The rehabilitation must meet all the requirements of the Federal tax incentive program.

2.   The "Small Project Rehabilitation Credit." A 25% state credit for the rehabilitation of certified historic structures with certified qualified rehabilitation expenditures of between $50,000 and $250,000. This credit is available to entities that do not claim the federal rehabilitation credit. Applicants must meet all federal tax code qualifications except the substantial rehabilitation requirement.

3.   The "Affordable Housing Rehabilitation Credit Increase". The State Substantial Rehabilitation Credit and the Small Project Rehabilitation Credit are increased currently to 33% if the rehabilitation project results in the creation of:

  • At least 50% of the aggregate square feet of the completed project is housing of which at least 50% of the aggregate square feet of the completed housing creates new affordable housing; or

  • At least 33% of the aggregate square feet of the completed project creates new affordable housing.

Please contact the Maine State Housing Authority (MSHA) for additional eligibility requirements. Click here to view the MSHA statute.

4.   State credits are fully refundable to any Maine taxpayer. One quarter or 25% of the total state credit is claimed for the taxable year in which the property is placed in service, and 25% of the total credit is taken in each of the next three (3) taxable years. There is a "per year" state credit cap of $5 million for each project.

If Maine's Substantial Rehabilitation Credit is applied for, the rehabilitation expense must exceed the greater of the "adjusted basis" of the building or $5,000 within a 24-month period, or a 60-month period for phased projects. The adjusted basis is the purchase price of a building minus land costs and depreciation, plus any capital improvements.

For Maine's Small Project Rehabilitation Credit, the certified qualified rehabilitation expenditures must be between $50,000 and $250,000 within either a 24-month or, if the project will be completed in phases, a 60-month period.

Property owners are strongly advised to consult with the Maine Historic Preservation Commission before beginning a rehabilitation to resolve potential design and rehabilitation problems that could result in denial of the credits.

National Register of Historic Places

The National Register of Historic Places is the official list of the Nation's historic places worthy of preservation. Authorized by the National Historic Preservation Act of 1966, the National Park Service's National Register of Historic Places is part of a national program to coordinate and support public and private efforts to identify, evaluate, and protect America's historic and archaeological resources.

Properties listed in the Register include districts, sites, buildings, structures, and objects that are significant in American history, architecture, archaeology, engineering, and culture. The National Register is administered by the National Park Service, which is part of the U.S. Department of the Interior. The Maine Historic Preservation Commission (MHPC), a state governmental agency, has been designated as the State Historic Preservation Office, and it oversees the administration of the National Register program in the State of Maine.

All properties listed in the National Register must meet the criteria established by the National Park Service. This criteria is applied national wide, and seeks to ensure that all listed property are both significant, within the areas of architecture, archaeology, engineering, culture or history, and that they retain their historic designs, materials, workmanship and sense of time and place.

There are many misconceptions about what results when a property is listed in the National Register.

The National Register DOES:

  • Identify historically significant buildings, structures, sites, objects, and districts, according to the National Register criteria for evaluation.
  • Encourage the preservation of historic properties by documenting the significance of historic properties and by lending support to local preservation activities.
  • Enable federal, state, and local agencies to consider historic properties in the early stages of planning projects.
  • Provide for review of federally funded, licensed, or sponsored projects which may affect historic properties.
  • Make owners of historic properties eligible to apply for grants for preservation activities.
  • Encourage the rehabilitation of income-producing historic properties which meet preservation standards through tax incentives

The National Register DOES NOT:

  • Restrict the rights of private property owners in the use, development, or sale of private historic property.
  • Lead automatically to historic district zoning.
  • Force federal, state, local, or private projects to be stopped.
  • Provide for review of state, local, or privately funded projects which may affect historic properties.
  • Guarantee that grant funds will be available for all significant historic properties.
  • Provide tax benefits to owners of residential historic properties, unless those properties are rental and treated as income-producing by the IRS.

Where to Start (How to list a property)

The National Register nomination process usually starts with our State Historic Preservation Office, the Maine Historic Preservation Commission (MHPC). Contact MHPC or for National Register information, research materials, and necessary forms to begin the nomination process. 

How are Properties Evaluated?

To be considered eligible, a property must meet the National Register Criteria for Evaluation. This involves examining the property’s age, integrity, and significance.

• Age and Integrity. Is the property old enough to be considered historic (generally at least 50 years old) and does it still look much the way it did in the past?

• Significance. Is the property associated with events, activities, or developments that were important in the past? With the lives of people who were important in the past? With significant architectural history, landscape history, or engineering achievements? Does it have the potential to yield information through archeological investigation about our past?

National Register Listing Process

• Nominations can be submitted to MHPC from property owners, historical societies, preservation organizations, governmental agencies, and other individuals or groups. Official National Register Nomination Forms are downloadable. National Register Bulletins can also provide guidance on how to document and evaluate certain types of properties. Sample Nominations provide additional useful information.

• MHPC notifies affected property owners and local governments and solicits public comment. If the owner (or a majority of owners for a district nomination) objects, the property cannot be listed but may be forwarded to the National Park Service for a Determination of Eligibility (DOE).

• Proposed nominations are reviewed by MHPC and the state’s National Register Review Board. The length of the state process varies but will take a minimum of 90 days.

• Complete nominations, with certifying recommendations, are submitted by the state to the National Park Service in Washington, D.C. for final review and listing by the Keeper of the National Register of Historic Places. The National park Service makes a listing decision within 45 days.

*Note: National Register nominations of Tribal properties start with the Tribal Historic Preservation Officer. National Register nominations of federal properties start with the agency’s Federal Preservation Officer.

Results & Owner Information

Listing in the National Register of Historic Places provides formal recognition of a property’s historical, architectural, or archeological significance based on national standards used by every state. Results include:

• Becoming part of the National Register Archives, a public, searchable database that provides a wealth of research information.

• Encouraging preservation of historic resources by documenting a property’s historic significance.

• Providing opportunities for specific preservation incentives, such as:

> Federal preservation grants for planning and rehabilitation
Federal investment tax credits
> Preservation easements to nonprofit organizations
> International Building Code fire and life safety code alternatives

• Possible State tax benefit and grant opportunities. Check with your State Historic Preservation Office for historic property incentives available within your state.

• Involvement from the Advisory Council on Historic Preservation when a Federal agency project may affect historic property.

• Find out information on the care and maintenance of your historic property through various NPS Preservation Briefs and Tech Notes.

• Network with other historic property owners, tour historic areas, or chat with preservationists through Conferences, Workshops, and Preservation Organizations.

• Celebrate your listing by ordering a bronze plaque that distinguishes your property as listed in the National Register of Historic Places.

Listing and Ownership

•Under Federal Law, the listing of a property in the National Register places no restrictions on what a non-federal owner may do with their property up to and including destruction, unless the property is involved in a project that receives Federal assistance, usually funding or licensing/permitting.

• National Register listing does not lead to public acquisition or require public access.

• A property will not be listed if, for individual properties, the owner objects, or for districts, a majority of property owners object.

• National Register listing does not automatically invoke local historic district zoning or local landmark designation.

• Federal Regulation 36 CFR 60 authorizes the National Register of Historic Places.

• Contact your State Historic Preservation Office (SHPO) for any specific state rules or regulations

The Secretary of the Interior's Standards

Rehabilitation projects must meet the following Standards, as interpreted by the National Park Service, to qualify as “certified rehabilitations” eligible for both the Federal and Maine tax credits. The Standards are applied to projects in a reasonable manner, taking into consideration economic and technical feasibility.

The Standards apply to historic buildings of all periods, styles, types, materials, and sizes. They apply to both the exterior and the interior of historic buildings. The Standards also encompass related landscape features and the building’s site and environment as well as attached, adjacent, or related new construction.

  1. 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.
  2. The historic character of a property shall be retained and preserved. The removal of historic materials or alteration of features and spaces that characterize a property shall be avoided.
  3. 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.
  4. Most properties change over time; those changes that have acquired historic significance in their own right shall be retained and preserved.
  5. Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a historic property shall be preserved.
  6. Deteriorated historic features shall be repaired rather than replaced. Where the 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.
  7. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible.
  8. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken.
  9. 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.
  10. 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.

Guidelines for Rehabilitating Historic Buildings

The Guidelines from the National Park Service assist in applying the Standards to rehabilitation projects in general; consequently, they are not meant to give case-specific advice or address exceptions or rare instances. These Guidelines are also available in PDF format.

The Guidelines on Sustainability for Rehabilitating Historic Buildings stress the inherent sustainability of historic buildings and offer specific guidance on “recommended” rehabilitation treatments and “not recommended” treatments, which could negatively impact a building’s historic character. These Guidelines are also available from the National Park Service as an interactive web feature.