This week’s post has some great preservation news to share! We’re happy to announce another successful round of the Pennsylvania Historic Preservation Tax Credit allocation and an expansion of this successful program.
What are the Pennsylvania Historic Preservation Tax Credits?
The PA Historic Preservation Tax Credit program provides tax credits to qualified taxpayers who will be completing the rehabilitation of a qualified historic structure into an income-producing property. The program is administered by Pennsylvania Department of Community and Economic Development (DCED) with assistance from the PA Department of Revenue and PA SHPO.
Historic tax credits are helping to renovate the ca. 1759 Man Full of Trouble Tavern in Philadelphia.
To be eligible for the state historic preservation tax credit:
- properties must be listed in the National Register of Historic Places or contribute to a listed historic district;
- applicants must have a rehabilitation plan that is approved by PA SHPO as being consistent with The Secretary of the Interior’s Standards for the Treatment of Historic Properties; and
- applicants must be qualified taxpayers, which includes an individual, corporation, limited liability company, limited liability partnership or any other form of legal business entity.
In each application round, tax credit awards are distributed to qualifying projects on a first-come, first-served basis, with equitable regional distribution. Applications are accepted once a year, typically in early October. DCED’s website includes a link to the application.
Twenty-one Projects Awarded Pennsylvania’s State Historic Tax Credits in 2024
On July 16, 2024, DCED announced that twenty-one projects across the Commonwealth were awarded a total of $5 million in Pennsylvania Historic Preservation Tax Credits (PA HPTC) through the FY 2023-2024 PA HPTC Allocation.
The Saleme Building in Altoona, Blair County is part of the Downtown Altoona Historic District and is being rehabilitated into office space.
During this year’s round of reviews all submitted applications/projects received a tax credit allocation, with no applications/projects denied by either DCED, PHMC, or the Pennsylvania Department of Revenue. These projects also applied for the federal historic tax credit.
| Project | County | Amount |
|---|---|---|
| C.M. Schwab Industrial School | Allegheny | $200,000 |
| Westinghouse Air Brake General Office | Allegheny | $250,000 |
| New Granada Theater | Allegheny | $300,000 |
| Belmar School | Allegheny | $300,000 |
| The American House | Berks | $400,000 |
| United Methodist Church | Blair | $150,000 |
| Saleme Building | Blair | $50,000 |
| Eastern Pin Ticket and Tag Company Building | Bucks | $250,000 |
| Otto Eisenlohr & Bros. Cigar Factory | Bucks | $200,000 |
| Nittany Lion Inn | Centre | $325,000 |
| Scranton Electric Building | Lackawanna | $400,000 |
| Stehli Silk Mill | Lancaster | $325,000 |
| Roxborough Mills Building | Philadelphia | $200,000 |
| Reyburn Manufacturing Company Building | Philadelphia | $300,000 |
| 1906 N. 6th Street | Philadelphia | $200,000 |
| A Man Full of Trouble Tavern | Philadelphia | $50,000 |
| Germantown Fireproof Storage Building | Philadelphia | $150,000 |
| Bellevue-Stratford Hotel | Philadelphia | $300,000 |
| Star Carpet Mill | Philadelphia | $200,000 |
| Garden Court Plaza Apartments | Philadelphia | $250,000 |
| American Baptist Publication Society/Crozer Building | Philadelphia | $200,000 |
Expansion of Pennsylvania’s State Historic Tax Credit Program
On July 11, 2024, Governor Josh Shapiro signed into law a $47.6 billion bipartisan budget for fiscal year 2024-25. The budget included an increase in the annual allocation/cap for state historic preservation tax credits from $5 million to $20 million. This increase in funding will facilitate more rehabilitation projects to be completed across the Commonwealth.
The increased allocation is due to advocacy efforts by the PA Historic Preservation Tax Credit Coalition, spearheaded by Preservation Pennsylvania and the Preservation Alliance for Greater Philadelphia. Additional support to expand the program was provided by both preservation advocates statewide and support from House and Senate leadership.
Historic tax credits will help transform the American House in Reading, Berks County into space for Alvernia College’s Reading CollegeTowne Campus.
The increased allocation allows Pennsylvania’s tax credit program to be more in line with the programs offered by neighboring states and may incentivize investment by out-of-state developers and investors.
While the increase in funding is a major boost to historic preservation in the state, efforts are continuing to implement several administrative changes that will make the program even more effective, namely:
- clarify that projects that contain a non-profit as a partner in a Limited Liability Corporation (LLC) are eligible to receive historic preservation tax credits;
- increase the per project cap from $500,000 to $2.5 million; and
- adjust the fees for reviewing and administering the historic preservation tax credit program at DCED and PHMC.
Isn’t there another tax credit program for rehabilitating historic buildings?
Yes! The Federal Historic Tax Credit, which is also known as the Rehabilitation Investment Tax Credit, allows owners of income-producing properties to take a dollar-for-dollar tax credit on federal income tax for eligible costs related to the rehabilitation of a historic property for a new use. PA SHPO administers the Historic Tax Credit program in partnership with the National Park Service and the Internal Revenue Service.
The vacant Belmar School in Pittsburgh will be rehabilitated into a functioning educational building once again.
A 20% credit is available. To be eligible for this federal historic tax credit:
- the property must be individually listed in the National Register, contribute to a National Register historic district, or contribute to a Certified Local District;
- the property must be used for income-producing purposes;
- the property must be owned by the same owner and be an income-producing property for five years;
- the rehabilitation work must follow The Secretary of the Interior’s Standards for the Treatment of Historic Properties; and
- the cost of rehabilitation must exceed the pre-rehabilitation cost of the building as determined by the twenty-four month “substantial rehabilitation test”.
Interested in learning more?
There are three easy ways you can learn more about the historic tax credit programs available to rehabilitate historic buildings in Pennsylvania:
- search our blog using the key word “tax credit,”
- check out our website, and
- get in touch with PA SHPO’s tax credit staff.
