How to Apply for Historic Tax Credits: A Step-by-Step Guide for Building Owners

Phillis Wheatley School

Historic tax credits (HTCs) are a powerful incentive to help property owners rehabilitate significant buildings while preserving architectural heritage. Whether you're restoring a commercial block downtown or breathing new life into a long-vacant structure, tax credits can offset a meaningful portion of your qualified expenses. 

This guide walks you through everything you need to know—from confirming eligibility to applying for certification and claiming your credits. 

Step 1: Determine If Your Building Qualifies as Historic 

Before diving into the application, it’s essential to understand how “historic” is defined—and whether your building fits the bill. 

What Is the National Register of Historic Places? 

The National Register of Historic Places is the federal government’s official list of properties recognized for their historical, architectural, or cultural significance. It’s maintained by the National Park Service and includes: 

• Individually listed properties (like courthouses, churches, theaters) 

• Historic districts (collections of buildings with a shared story or style) 

• Sites, structures, and even objects of historic value 

A property may be eligible if it's: 

• At least 50 years old in most cases, 

• Well-preserved in terms of design, materials, and setting, and 

• Associated with an important historical event, figure, or architectural style. 

  

  Cielo Place

What If My Building Isn’t Listed? 

If it’s not already on the National Register, don’t worry—it may still be eligible. 

You’ll need to initiate a nomination through your State Historic Preservation Office (SHPO). That process involves: 

• Writing a formal description of the building’s history and architecture 

• Providing historical photos, maps, and documentation 

• Justifying its significance within a local, state, or national context 

This process can take 6 to 12 months, depending on the complexity and SHPO workload. Once the nomination is approved by your state, it moves to the National Park Service for final listing. 

What Is a Contributing Building? 

Even if a building isn’t individually listed, it can still qualify if it’s a contributing building within a listed historic district. A contributing building is one that: 

• Retains its historic appearance or materials 

• Adds to the overall character and story of the district 

Your SHPO can confirm whether your building contributes to a district. If it’s been heavily altered or has lost its historic elements, it may be considered non-contributing and could be ineligible for credits. 

420 Division Building

Step 2: Submit the Federal Three-Part Application 

The National Park Service administers the federal HTC program using a three-part application system. Each part builds on the last and tracks your progress from eligibility to completed construction. 

Part 1: Evaluation of Significance 

Time: 1–3 months (or longer if nominating a building) 

This step verifies that your building is listed on the National Register or is a contributing structure. If you’re submitting a new nomination, expect this stage to take longer. 

Part 2: Description of Rehabilitation 

Time: 1–3 months for review and approval 

You’ll describe exactly what work you plan to do. You must show that the rehabilitation will follow the Secretary of the Interior’s Standards for Rehabilitation—a set of guidelines that promote the preservation of original architectural elements while allowing functional upgrades. 

You’ll submit: 

• Existing condition photos 

• Proposed floorplans and elevations 

• Material descriptions (windows, siding, etc.) 

• Explanations of any changes 

It's crucial that this be submitted before construction begins. If you begin work and later find your plans aren't eligible, you may lose the credits. 

Construction Phase 

Time: 6–24 months 

While you carry out the rehabilitation work, you’re responsible for: 

• Documenting all stages of the project (photo documentation before, during, and after) 

• Keeping detailed cost records 

• Staying within the approved scope or filing amendments if the plan changes 

579 Selby

Part 3: Request for Certification of Completed Work 

Time: 1–3 months 

Submitted after construction is complete, this confirms that the work was executed according to the approved Part 2. You’ll submit after-photos taken from the same angles as your “before” set and verify that the building is ready for occupancy. 

Upon NPS approval, your rehabilitation becomes a “certified rehabilitation,” which officially qualifies you for the tax credits. 

Step 3: Identify Qualified Rehabilitation Expenses (QREs) 

You can only claim credits for qualified expenses directly related to the building’s rehabilitation. These typically include: 

• Structural repairs and stabilization 

• Masonry restoration, roofing, and windows 

• HVAC, electrical, and plumbing upgrades 

• Interior finish restoration 

• Architectural and engineering fees 

Non-qualified costs include landscaping, parking lots, appliances, new additions, or tenant improvements unrelated to historic preservation. 

Keeping clean, categorized financial records is vital—your final credit amount will be based on eligible costs only. 

Commission House

Step 4: Apply for State Historic Tax Credits (If Available)

 

Many states offer their own tax credit programs in addition to the federal credit—sometimes with refund options or supplemental incentives. 

Each state will define: 

• The credit amount (typically 20–30% of QREs) 

• Whether the credit is refundable 

• How and when to apply 

• Which state tax forms to include 

Your SHPO and state Department of Revenue are key contacts during this stage. You can view details by state here. 

Timeline for Claiming Credits 

Time: 1–3 months after Part 3 approval 

• Federal credit is claimed via IRS Form 3468 during the tax year the building is placed in service. 

• State credits are filed based on your state’s tax filing calendar. Refunds or certificates may take additional time depending on processing speed. 

Final Thoughts 

Historic tax credits are one of the most effective tools to unlock the potential of a historic property—whether you're saving a boarded-up commercial block or restoring a legacy building in your community. The key to a smooth process is starting early, building a solid paper trail, and aligning your rehab plans with the standards set by the National Park Service and your State Historic Preservation Office. 

Timing matters. Documentation matters. And patience pays off—literally. 

Now, once you’ve secured your tax credits, what comes next? 

That’s where the Rethos Historic Rehab Loan Program can be a game-changer. 

Rethos works with property owners who have earned or expect to earn state historic tax credits. We help unlock the value of your credits before they’re refunded or sold. 

So, if you're nearing completion or already holding a credit certificate, talk to us. We know this process inside and out, and we’re built specifically to support projects just like yours. 

Visit https://www.rethos.org/historic-rehab-loans to learn more or connect with our real estate team to see how your credits can help move your project forward.