Historic Preservation Tax Credit Program
Retaining the Historical Character of Buildings
This program offers tax credits to developers who sensitively rehabilitate historic buildings to offer them new life. Iowa offers this tax credit program to ensure character-defining features and spaces of buildings are retained to help create distinct and vibrant communities.
- State income tax credit of up to 25% of the qualified rehabilitation expenditures associated with the project
- “Qualified rehabilitation expenditures” or “QREs” means the same as defined in Section 47 of the Internal Revenue Code
- QREs generally include expenditures related to structural components of the building and some soft costs that would normally be charged to a capital account
- QREs do not include expenditures financed by federal, state or local government grants or forgivable loans unless otherwise allowed under Section 47 of the Internal Revenue Code
- Tax credits are transferable
- Building must be historically significant by meeting at least one of the following criteria:
- Building is listed on the National Register of Historic Places or determined by the staff at the State Historic Preservation Office (SHPO) to be eligible for listing
- Building is contributing to the significance of a historic district that is listed on or eligible to be listed on the National Register of Historic Places
- Building is designated as a local landmark by city or county ordinance
- Barn constructed before 1937 OR a barn listed on or eligible for listing on the National Register of Historic Places
- Project must include substantial rehabilitation, meeting one of the following criteria
- If building is a commercial building, qualified rehabilitation expenditures must equal at least 50% value of the building (excluding land) before rehabilitation or $50,000, whichever is less
- If building is a non-commercial building, qualified rehabilitation expenditure must equal at least 25% of the assessed value of the building (excluding land) before rehabilitation or $25,000, whichever is less
- Rehabilitation must meet the federal Secretary of the Interior’s Standards for Rehabilitation
- Only an eligible taxpayer may apply for the state tax credit
- An “eligible taxpayer” is defined as the fee simple owner of the property or someone having a long-term lease, which meets the requirements of the federal rehabilitation credit
- Applicant may be a nonprofit but may not be a governmental body
How Do I Apply?
- Part 1 Application- reviewed by the State Historic Preservation Office (SHPO) to determine the building’s historic significance and project eligibility; this application is submitted through the state’s ESHPO system.
- Part 1.5 Pre-Application meeting- takes place between the applicant, SHPO and IEDA staff to provide feedback on the Part 2 application submittal.
- Part 2 Application- reviewed by the SHPO to evaluate the proposed scope of work to ensure work meets The Secretary of the Interior’s Standards for Rehabilitation; this application is submitted through the state’s ESHPO system.
- Part 2B Registration Application- reviewed by SHPO and IEDA to determine project readiness and financial feasibility. Projects with approved Part 2B applications are registered for State Historic Preservation Tax Credits.
Registration applications for small projects (projects with qualifying expenses less than $750,000) are accepted on an ongoing basis.
Registration applications for large projects (projects with qualifying expenses over $750,000) are typically accepted twice per year.
Large and small project applications are submitted through iowagrants.gov. Applicants should not submit Part 2B applications through the State’s ESHPO system.
- Part 3 Application- submitted through iowagrants.gov; this application is reviewed by SHPO and IEDA to determine if completed work has met The Secretary of the Interior’s Standards for Rehabilitation and that all other program requirements and contract conditions have been met. Projects with approved Part 3 applications are issued tax credit by IEDA.
Applications will be due on September 15, 2023. Applications will be submitted through iowagrants.gov.