Enabling HTC to be used for public school buildings +

This provision would eliminate certain “prior use” limitations for government entities to rehabilitate historic public school buildings.

Modifications of tax-exempt use leasing rules +

This change would allow nonprofits and other tax-exempt entities to more easily rehabilitate their own historic properties. These changes would make more projects led by health care centers, arts organizations, community services, affordable housing organizations, and workforce training providers possible.

Modification of substantial rehabilitation definition +

This provision lowers the substantial rehabilitation threshold for all projects from 100% to 50% of a building’s basis. Reducing this eligibility threshold will make more buildings eligible for rehabilitation before they have deteriorated too significantly. This change will also allow historic building owners to more easily adapt projects to new uses in a changing economic landscape.

Sustain the 30% credit amount for small projects +

This provision would permanently extend the increase from 20% to 30% beyond 2025 for small projects (less than $2.5 million) to ensure smaller investments such as those common in rural and non-urban areas have a better ability to take advantage of the credit.

Elimination of the basis adjustment +

All projects would benefit from eliminating the requirement to subtract the amount of the HTC from a building’s basis for depreciation purposes. This provision would bring more value to the HTC and would make it easier to pair with other community development incentives like affordable housing and opportunity zone investments.

Increase the credit from 20-30% for all projects for at least 5 years +

All projects (placed in service after April 1, 2021) would receive a temporary increase to the credit to 30% through 2025. The credit would phase down to 26% in 2026, 23% in 2027, and return to 20% in 2028. This will help address unforeseen financing gaps and contribute to the economic recovery by invigorating many new historic rehabilitation projects, both big and small.

What Project Uses are Eligible/Ineligible for NMTCs? +

The NMTC program is flexible regarding the types and purpose of projects. QLICIs can be used to finance:

  • A real estate investment that develops or rehabilitates a building to bring new commercial, industrial, retail, and/or housing opportunities to an LIC.
  • Commercial/manufacturing equipment purchases to enhance operations and create new job opportunities.
  • Supporting entrepreneurs and new/existing operating businesses by providing flexible and patient loans.
  • However, many CDEs seek investments in projects that also support their individual missions, such as those that provide vital goods and services, create jobs, or spur further investment in LICs.

Ineligible activities for NMTC investment include:

  • Residential rental properties
    • The income produced by the residential portion of an NMTC-eligible project can be no more than 80% of the total income generated.
  • Certain businesses such as:
    • Golf courses, race tracks, massage parlors, hot tub facilities, gambling facilities, country clubs, tanning salons, and stores where the principal business is the sale of alcohol for off-site consumption
How does NTCIC determine a project’s need for NMTCs? +

The NMTC is meant to provide flexible and accessible capital to projects and businesses that are ineligible or unable to secure traditional financing to complete the project. As such, CDEs will review a project’s current financials to determine that “but for” (without) New Markets Tax Credit financing, the project/investment would not be feasible. Ways projects can show their need for NMTCs include:

  • Attempts to secure traditional investments
  • Existing financing gaps
  • Ongoing and extended fundraising needs
  • Limited debt service capabilities
What Locations are Eligible for NMTCs? +

A project must be located in a qualified census tract that meets the determination of a Low-Income Community (LIC). The NMTC program defines Low-Income Communities as census tracts:

  • Where the poverty rate is at least 20%; or
  • Where the median family income does not exceed 80% of the area median family, or
  • Where the median family income does not exceed 85% of the area median family income provided the census tract is located in a high migration rural county; or
  • Where the census tract has a population of less than 2,000 and is contained within a Federally designated Empowerment Zone and is contiguous to at least one other LIC.
How Do I Get Started with a Historic Tax Credit Project? +

To qualify for Historic Tax Credits, property owners or developers must complete a 3-part application process that is approved by the National Park Services and their State Historic Preservation Office. This application will ensure the owner/developer undertakes the certified substantial rehabilitation of a certified historic structure with an eligible end-use.

  • Certified Historic Structure: A building that is:
    • Either individually listed on the National Register of Historic Places, or a contributing building in a National Register Historic District
    • Income-producing (owner-occupied residential buildings do not qualify)
  • Certified Substantial Rehabilitation: A property rehabilitation where:

To get started, contact your local State Historic Preservation Office for more information and technical assistance, and connect with a trusted tax advisor.

Who Benefits from Historic Tax Credits? +

NTCIC’s involvement with leveraging Historic Tax Credits benefits the following groups: 

  • Historic Building Owners: We provide the funding you need to rehabilitate your certified historic building.
  • Communities: Repurposing historic properties revitalizes communities and provides jobs. 
  • Investors: We provide direct equity investment opportunities for historic rehabilitation projects.
How Does the Historic Tax Credit Program Work? +

Historic Tax Credits can either be used to offset the historic building owner’s federal tax liability or transferred to a corporate investor in exchange for additional equity capital that can be used for long-term project financing. Because the Internal Revenue Code’s Passive Activity Rules severely limit, and sometimes prohibit, the use of tax credits by individuals, most building owners syndicate tax credits to a third-party investor who can utilize them.

Syndicated Historic Tax Credit transactions require the investor to be admitted into a legal entity, such as a limited partnership or limited liability company that will either own the historic building or holds a long-term operating lease. In these circumstances, the Historic Tax Credits investor serves as either the limited partner or investor member while the building owner serves as either the general partner or managing member.

The majority of Historical Tax Credits syndication transactions generate over $1 million in tax credits and are highly structured, tax code-intensive deals. Since NTCIC has already raised millions of dollars in equity for Historic Tax Credit-only and multi-credit projects, we can greatly simplify and expedite the process of obtaining funding for your certified historic building renovation.

What Buildings Qualify for Historic Tax Credits? +

To qualify for Historic Tax Credits, a building must either:

  • Be listed on the National Register of Historic Places, or
  • Be a contributing element of a historic district listed on the National Register of Historic Places or another qualifying local historic district.
What is the Historic Tax Credits Program? +

Federal Historic Tax Credits (HTC), which are also referred to as Historical Tax Credits and Historic Rehabilitation Tax Credits, make restoring historic buildings economically viable. They do so by encouraging the preservation and adaptive reuse of certified historic buildings, primarily in low- and moderate-income census tracts and economically distressed areas, via private investment. Since the program’s inception in 1976, more than 44,000 historic properties throughout the United States have been preserved and over 2.5 million jobs created. 

Previously, the HTC program consisted of two separate tax credits: 1) a 20% credit for the rehabilitation costs of buildings listed on the National Register of Historic Places; and 2) a 10% credit for the rehabilitation of non-historic, non-residential buildings built before 1936. 

In December 2017, however, a federal tax bill was passed that retained the 20% Historic Tax Credit for certified rehabilitation of historic structures but eliminated the 10% tax credit. The 20% Historic Tax Credit must be claimed at a rate of 4% per year over a five-year period

What types of projects does NTCIC finance with its NMTC allocation? +

NTCIC will use its NMTC allocation to offer equity and debt products to real estate projects that rehabilitate strategic historic properties located in Severely Distressed communities whose primary use provides direct benefits to low-income persons and locally-owned small businesses. For more information on our NMTC portfolio, contact info@ntcic.com

What is the minimum NTCIC HTC investment? +

NTCIC prefers transactions that have a minimum of $2 million in Federal HTCs. If your Project has between $750,000 and $1.5 million in federal HTCs and also qualifies for NMTC, however, it may qualify under our Main Street Small Deal Fund.

Does NTCIC facilitate investments in the historic rehabilitation of small, private homes? +

No, NTCIC is a tax credit syndicator that works with developers involved in large scale projects with development costs of $500,000 or more.

How can I contact someone to find investment for my project? +

Our acquisitions team is ready and available to connect with you. For HTC & NMTC investments, contact Kandi Jackson; for Solar ITC investments, contact Karin Berry.

I live in an old house that needs renovation. Can I use tax credits to help finance its rehabilitation? +

There may be local programs that are available, but NTCIC does not work with these types of credits. To connect with your State Historic Preservation Office, visit: https://www.nps.gov/nr/shpolist.htm

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