Efforts to fix up Iowa’s historic properties and business districts got a boost this year. During the 2013 session, the Legislature expanded opportunities for Iowans to use state historic tax credits.
This program attracts private investment to neighborhoods, creates jobs, enhances property values and develops affordable housing by providing an income tax credit worth 25 percent of qualified rehabilitation costs for historic buildings. To date, state historic tax credits have leveraged more than $1 billion in rehabilitation costs by private investors in Iowa communities.
We’ve improved this popular program with Senate File 436, which:
1. Changes the definition of commercial property. Previously, Iowa law categorized property as residential, barn or commercial. We now have only two categories: commercial and other than commercial property. This will allow more properties that do not earn income to qualify for the tax credit.
2. Helps more small projects qualify for tax credits by decreasing the dollar amount for the project cost. For commercial property projects, the amount to qualify for the tax credit is now 50 percent of the value of the building or $50,000, whichever is less. Buildings other than commercial — historic churches and other nonprofits — qualify for the tax credit if the project is 25 percent of the value or $25,000.
3. Raises the cap on projects that qualify for the Small Project Fund. Projects with expenses as high as $750,000 now qualify as “small” and may be submitted and funded at any time of year.
4. Increases the length of time available to complete a project by offering a 12-month extension if more than half of the qualifying rehabilitation funds have been spent within the first 60 months of the project.
We had hoped to make the State Historic Tax Credit Program even better when the Legislature gave bipartisan approval to increase the amount of historic tax credits by $50 million. Unfortunately, Gov. Branstad vetoed that effort to encourage rehabilitation of our historic properties and business districts.
For complete details on State Historic Preservation Tax Credits, visit http://tinyurl.com/SHPTIP or call the Iowa Department of Cultural Affairs at 515-281-5111.
Senator Rita Hart represents Clinton County and northern Scott County in the Iowa Senate.