Are you interested in tax credits?
If you've acquired a historic property in Missouri or Greene County, you may be eligible for tax credits to support your preservation efforts. Both federal and state programs offer incentives for the rehabilitation of historic buildings, encouraging the preservation of our architectural heritage. By leveraging these tax incentives, property owners in Missouri and Greene County can play a pivotal role in preserving our rich architectural heritage while benefiting from financial support for their rehabilitation projects.
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The federal program provides a 20% income tax credit for the rehabilitation of income-producing, certified historic structures. This applies to properties rehabilitated for commercial, industrial, agricultural, or rental residential purposes. It's important to note that private residences do not qualify for this federal credit. The Missouri State Historic Preservation Office, in partnership with the National Park Service, oversees the certification process to ensure that rehabilitation work complies with the Secretary of the Interior’s Standards for Rehabilitation.
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Missouri offers a state tax credit to further incentivize the preservation of historic structures:
25% Tax Credit: Available for eligible costs associated with the rehabilitation of certified historic structures located within Kansas City and St. Louis.
35% Tax Credit: For properties located outside of Kansas City and St. Louis that do not receive Low-Income Housing Tax Credits, including those in Greene County and Springfield.
These credits can be applied to both income-producing properties and owner-occupied residences, making them accessible to a wide range of property owners. Recent legislative updates have expanded eligibility to include nonprofit entities, allowing them to benefit from these incentives as well.
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For income-producing properties, it's possible to combine both federal and state tax credits, significantly enhancing the financial feasibility of rehabilitation projects. This combination can result in a substantial offset of qualified rehabilitation expenses, promoting the preservation and adaptive reuse of historic buildings throughout Missouri.
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The Missouri Department of Economic Development (DED) administers the state tax credit program. Applications are accepted year-round, with the current cycle having launched on October 7, 2024. Applicants are encouraged to submit their materials via the DED's online platform, Submittable. It's advisable to consult with the State Historic Preservation Office (SHPO) early in the planning process to ensure that your project meets the necessary standards and to facilitate a smooth application experience.
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Missouri Department of Economic Development: Provides comprehensive information on the state tax credit program, including guidelines and application materials.
Missouri State Historic Preservation Office: Offers guidance on the certification process and ensures that rehabilitation projects comply with established preservation standards.
Tax Credits for Income-Producing Historic Properties
Investing in historic buildings isn’t just about preserving the past—it’s also a smart financial move. If you own an income-producing historic property in Missouri, Greene County, or Springfield, you may be eligible for substantial state and federal tax credits to support your rehabilitation project.
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Income-producing properties—such as commercial buildings, apartments, industrial, and agricultural structures—can qualify for a combined federal and state tax credit worth up to 55% of eligible rehabilitation costs.
These credits reduce your tax liability dollar for dollar, making preservation more financially feasible. You can use these credits to offset business tax liabilities or sell the credits for cash to fund your project.
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Your property must be:
A certified historic structure, meaning it is:
Individually listed on the National Register of Historic Places
A contributing building within a National Register Historic District
Deemed a certified historic structure after a formal review by the National Park Service (NPS)
Income-producing (i.e., used for commercial, rental residential, agricultural, or industrial purposes)
Rehabilitated according to the Secretary of the Interior’s Standards for Rehabilitation
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For income-producing properties, Missouri and the federal government offer the following incentives:
Federal Tax Credit: 20% of Qualified Rehabilitation Expenditures (QREs)
Missouri State Historic Tax Credit:
25% of QREs in Kansas City & St. Louis
35% of QREs in all other areas, including Greene County and Springfield
By combining these credits, property owners in Springfield and Greene County can receive a total tax credit of up to 55% of eligible rehab costs.
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The Missouri Department of Economic Development (DED) administers the state tax credit program, and the National Park Service (NPS) oversees federal historic tax credits.
Steps to apply:
Confirm your property’s historic designation with the Missouri State Historic Preservation Office (SHPO).
Submit a tax credit application to SHPO and National Park Service (for federal credits).
Ensure your rehabilitation project follows preservation standards.
Receive tax credits upon project completion and apply them to your tax return.
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For detailed guidelines and application materials, visit:
Missouri State Historic Preservation Office – mostateparks.com
Missouri Department of Economic Development – ded.mo.gov
National Park Service: Technical Preservation Services – nps.gov/tps
By leveraging these tax incentives, you can revitalize historic properties, increase property value, and contribute to the cultural and economic growth of Missouri’s historic communities.
Non-Income-Producing Historic Properties
If you own a non-income-producing historic property—such as a private residence—in Missouri, including Greene County and Springfield, you may be eligible for the Missouri State Historic Preservation Tax Credit Program. This program offers a 25% state income tax credit on qualified rehabilitation expenses to encourage the preservation of owner-occupied historic homes.
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If you qualify for Missouri’s Historic Preservation Tax Credit, you can apply a percentage of your Qualified Rehabilitation Expenditures (QREs) toward your Missouri state income tax liability.
For example:
If you owe $10,000 in Missouri state income taxes
And you receive a $7,500 historic preservation tax credit
Your new tax bill would be $2,500 ($10,000 - $7,500)
What If I Don’t Owe That Much in Taxes?
If your tax credit is larger than your tax bill, you can:
Carry forward the credit for up to 10 years, applying unused portions to future tax bills.
Sell or transfer the credit (Missouri’s program allows tax credits to be sold, which means you can convert them into cash).
Who Benefits?
Homeowners: If you own a historic non-income-producing property (private residence), you can reduce your personal state income taxes.
Key Takeaway
A Missouri state income tax credit means free money to offset your tax burden. It’s a powerful tool to reduce costs when preserving historic properties.
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Historic Designation: Your property must be a certified historic structure, meaning it is either:
Individually listed on the National Register of Historic Places
A contributing building within a National Register Historic District
Located within a certified local historic district
Rehabilitation Costs: Eligible rehabilitation expenses must exceed 50% of the property's total basis (acquisition cost).
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Example Calculation:
Assume you plan a rehabilitation project with the following financials:
Total Project Expenses: $100,000
Qualified Rehabilitation Expenses (QREs): $50,000
Missouri State Tax Credit (25%): $50,000 (QREs) × 25% = $12,500
In this scenario, you would receive a $12,500 state income tax credit, directly reducing your tax liability.
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Confirm Historic Status: Verify your property's eligibility through the Missouri State Historic Preservation Office (SHPO).
Prepare Documentation: Gather necessary documents, including detailed rehabilitation plans and cost estimates.
Submit Application: Apply through the Missouri Department of Economic Development (DED). Applications are accepted year-round.
Begin Rehabilitation: After receiving approval, proceed with your rehabilitation project, ensuring compliance with the Secretary of the Interior’s Standards for Rehabilitation.
Claim Tax Credit: Upon project completion and final approval, claim your tax credit on your Missouri state income tax return.
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Missouri State Historic Preservation Office: Offers guidance on historic designation and rehabilitation standards.
Missouri Department of Economic Development: Provides application forms and detailed program information.
By utilizing this tax credit, homeowners can preserve Missouri's rich architectural heritage while benefiting financially from their investment in historic properties.