Historic Investment Tax Credits
New Market Tax Credits
SunTrust Community New Market Tax Credits
DHR - Facts about the ITC Program
Funding and Grant Resources

Historic Investment Tax Credits
1. Program Benefits
2. Eligibility Requirements
3. Qualifying Expenses
4. General Timeline
5. Fees
6. Additional Information

1. Program Benefits
The Historic Rehabilitation Tax Credit Program provides a dollar-for-dollar reduction of Federal and State income tax equal to the designated percentage of qualifying rehabilitation costs.

State: 25% (Virginia)
Federal: 20%

There is also a 10% Federal credit available for buildings found not to be eligible for the National Register, but which are non-residential and were constructed prior to 1936. The program benefit on the state level varies from State to State; Virginia has the highest level of benefit than any other State in the Nation.

2. Eligibility Requirements
State:
- The resource must be certified “eligible” for the Virginia Landmarks Register; or listed on the Register either individually or as a contributing structure in a historic district
- The resource can be income-producing or owner-occupied
- The cost of qualifying rehabilitation expenses must equal at least 50% of the assessed value of the resource (25% if owner-occupied)

Federal:
- The resource must be listed on the National Register of Historic Places either individually or as a contributing structure in a historic district
- The resource must be income-producing
- The cost of qualifying rehabilitation expenses must equal at least the adjusted basis of the resource, or $5,000, whichever is greater
- Both the State and Federal programs require that the rehabilitation work be completed within a 24-month period, or, if stated in advance, the project can be phased over a 60-month period.

3. Qualifying Expenses
Qualifying expenses include both hard and soft costs. Hard costs are associated with the work related directly to the structure and its operation:
- Plumbing
- Wiring
- Construction

Soft costs are those associated with the professional services required to rehabilitate the structure:
- Architectural Fees
- Engineering Fees
- Specialty Consultants

Expenses, which do not qualify for either State or Federal Tax Credits include items such as the acquisition cost of the resource, site work, cabinets, appliances and new additions.

4. General Timeline
Part 1* 30—45 days for approval per agency
Part 2* 30—45 days for approval per agency
Preliminary Information Form (P.I.F.)* Reviewed in March, June, Sept. and Dec.
Nomination Reviewed in March, June, Sept. and Dec.
Part 3* Reviewed in March, June, Sept. and Dec.
30—45 days for approval per agency

*Note: Part 1, Part 2 and the P.I.F. can be submitted concurrently

5. State & Federal Processing Fees
State Processing Fees
Fee Amount Cost of Rehabilitation Part 1 $0 N/A Part 2 $0 less than $50,000 $250 $50,000-$99,999 $400 $100,000-$499,999 $750 $500,000-$999,999 $1,500 $1 million or more Part 3 $100 less than $50,000 $250 $50,000-$99,999 $400 $100,000-$499,999 $750 $500,000-$999,999 $1,500 $1 million or more   Federal Processing Fees Fee Amount Cost of Rehabilitation Part 1 $0 N/A Part 2 $0 less than $20,000 $250 $20,000 or more Part 3 $0 less than $20,000 $500 $20,000-$99,999 $800 $100,000-$499,999 $1,500 $500,000-$999,999 $2,500 $1 million or more

Federal Processing Fees Fee Amount Cost of Rehabilitation Part 1 $0 N/A Part 2 $0 less than $20,000 $250 $20,000 or more Part 3 $0 less than $20,000 $500 $20,000-$99,999 $800 $100,000-$499,999 $1,500 $500,000-$999,999 $2,500 $1 million or more

6. Additional Fees
Professional services fees such as architectural and preservation consulting, accounting and legal consultation should also be anticipated in the tax credit process. Projects pursuing State credits over $100,000 must have a Certified Public Accountant verify all Part 3 expenses.

Additional Information
This summary is not an all-inclusive guide to the programs, but provides a general overview. Additional information and handouts from the Virginia Department of Historic Resources and the National Park Service are available from Commonwealth Architects and at: www.dhr.state.va.us/tax_credits/tax_credit.htm and www2.cr.nps.gov/tps/tax/brochure1.htm

New Market Tax Credits
1. Program Overview
2. Program Eligibility

1. Program Overview
The New Markets Tax Credit (NMTC) is a federal tax incentive intended to have the same type of positive influence on business and economic development that the Low Income Housing Tax Credit has had on the construction of affordable housing. It was authorized by Congress in 2000 to help spur the investment of $15 billion of capital in businesses that are located in low-income communities.
- The program is administered by the Community Development Financial Institution (CDFI) Fund, a part of the Treasury Department.
- To date, the fund has made 233 awards totaling $12.1 billion in allocations.
- Investors provide equity capital to Community Development Entities (CDEs.)
- The CDE’s investors are willing to take a below-market return from the CDE on their invested capital because the government subsidizes their return through tax credits.
- Because the CDE’s investors don’t require a market return from the CDE on their capital, the CDE can lend or invest in businesses at below-market rates or on other favorable terms.
- The tax credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year credit allowance period.
- In each of the first three years, the investor receives a credit equal to five percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is six percent annually.

2. Program Eligibility
- An organization wishing to receive awards under the NMTC Program must be certified as a CDE by the CDFI.
- To qualify as a CDE, an organization must:
- be a domestic corporation or partnership at the time of the certification application
- demonstrate a primary a mission of serving, or providing investment capital for, low-income communities or low-income persons
- maintain accountability to residents of low-income communities through representation on a governing board of or advisory board to the entity

Funding and Grant Resources
Virginia Department of Historic Resources
Incentives & Grants
The following department programs offer a variety of financial assistance for historic preservation. If you are interested in any of the programs, select their titles for more information.
Archaeological Threatened Sites. Archaeological sites are some of Virginia's most fragile resources. The Threatened Sites Program offers emergency funding for archaeological sites endangered by erosion, impending development, or vandalism. The program has saved archaeological remnants at 75 sites across Virginia, providing important information about our past that would have been lost.
Certified Local Government Grants. Certified Local Governments are eligible for grants that can be used to survey architectural and archaeological resources, prepare nominations to the National Register of Historic Places, create preservation planning documents and programs, create public education programs, and rehabilitate publicly owned buildings listed on the national register. 
Civil War Historic Site Preservation Fund. In 2008 the General Assembly authorized the Department of Historic Resources to award $5-plus million in competitive grants to private non-profit organizations to match federal and other monies for the preservation of any endangered Virginia Civil War historic site listed in the "Report on the Nation's Civil War Battlefields," which was issued in 1993 by the National Park Service's congressionally endorsed Civil War Sites Advisory Commission.
Easements. By donating historic preservation easements on their properties, owners are eligible for several financial incentives. The value of an easement, determined by an appraiser, can be deducted from federal taxable income, and up to 50% of the value of the easement may be claimed as a credit against state income taxes. Donation of an easement may stabilize or lower property taxes and can lower inheritance taxes. By eliminating the right to develop the property further, owners lower its estate value. Forty percent of the value of the land included in the easement donation may be excluded from a descendant's estate.
Rehabilitation Tax Credits. Interested in rehabilitating a historic building? Property owners who complete a certified rehabilitation of a significant historic building can receive an income tax credit on 25% of their eligible expenses through the Virginia Rehabilitation Tax Credit Program and an additional 20% credit through the Federal Rehabilitation Tax Credit Program.
State Grants. General Assembly grants are available to local governments, nonprofit historical associations, organizations, and museums for rehabilitation, maintenance, and operation of sites or facilities, or maintenance of collections and exhibitions. Here is the state grants application form.
Survey & Planning Cost Share Program. Through the cost share program, localities can partner with DHR to take stock of their historic resources. By knowing all of what it has, a locality can then make sound decisions about planning development. The department partially funds and fully administers the projects, relieving often over-burdened local planning officials. 
State Grants to Nonstate Agencies.
For information on applying to the Governor for nonstate agency funding in the Governor's next budget proposal to the General Assembly, please contact Ann Andrus, (804) 367-2323, ext. 133. 
Source: http://www.dhr.virginia.gov/homepage_general/finance.htm

Local Charitable Foundations:
Parsons Foundation
Scott Foundation
Gwathmey Memorial Trust
Roller-Bottimore
Robins Foundation
Dominion Foundation
Community Foundation
Cabell Foundation
Daughters of the American Revolution
Beirne Carter Foundation
Ukrop Foundation
Reynolds Foundation
Cole Trust
Bryant Foundation
Universal Leaf Foundation
Cabaniss Foundation
SunTrust
Elis Olsson Memorial
Charles Charitable Trust
Campbell Foundation
Dominion Foundation
Bank of America
Wachovia Securities
Wachovia Foundation
BB&T Foundation
Morgan Trust
Massey Foundation
Thalhimer – Charles G. & Fam.
William B. Thalhimer
Morton G. & Nancy P. Thalhimer
This list is provided as a guideline only. Commonwealth Architects is not affiliated with any of these organizations, and does not, in any way, guarantee or promise funding or grants for any individual or group from the foundations listed above.