Incentives and Grants for Historic Preservation
Funding historic preservation projects can be challenging due to often limited funding options. We offer here a brief outline of some of the grant and other incentive programs that are available to help support preservation efforts.
There are a few other incentive and loan programs, especially those that provide money for projects compatible with historic preservation goals such as adaptive reuses creating affordable housing or for recreational purposes. For example, a historic building that is adapted for senior housing units may be eligible for funding from state or federal housing programs or a historic building restored for use as a community center may be eligible for funding from recreation grant programs.
Additional Funding Sources
Click here for more information on Potential Funding Sources for Historic Preservation
Technical Bulletin #15 Incentives
Review the recently updated Incentives for Historic Preservation in California - Technical Assistance Bulletin #15, which includes current sources of federal, state and local incentives and grants.
Federal Incentives and Grants
Historic Preservation Tax Incentive Program
Owners of historic income-producing properties may be able to qualify for the Federal Historic Preservation Tax Incentives Program.
ADA Business Tax Credit and Deduction for Eligible Access Expenditures
To assist businesses with complying with the ADA, Section 44 of the IRS Code allows a tax credit for small businesses and Section 190 of the IRS Code allows a tax deduction for all businesses.
The tax credit for eligible costs is available to businesses that have total revenues of $1,000,000 or less in the previous tax year or 30 or fewer full-time employees.
The tax deduction is available to all businesses with a maximum deduction of $15,000 per year. The tax deduction can be claimed for expenses incurred in barrier removal and alterations.
To learn more about the tax credit and tax deduction provisions go to IRS Tax Credit and Deductions.
NPS Underrepresented Communities Grant
The National Park Service Underrepresented Community Grants provide funding to projects that identify and designate historic properites associated with communities currently underrepresented on the National Register of Historic Places. Grants are awarded annually.
NPS Route 66 Corridor Preservation Program - Cost-Share Grants
The Route 66 Corridor Preservation Program provides funding assistance in the form of cost-share grants, to support the preservation of the most significant and representative historic Route 66 buildings, structures, road segments, and cultural landscapes in the eight states through which the route passes. Assistance is also provided to support research, planning, oral history, and education outreach projects related to the preservation of Route 66.
Program cost-share grant funds are provided through congressional appropriations, which are determined each new fiscal year. Project eligibility criteria requires a minimum 50% (1:1) cost-share match provided by the applicant. All preservation, restoration, and rehabilitation projects are required to conform to the Secretary of the Interior's Standards for the Treatment of Historic Properties.
Charitable Contributions (Easements) for Historic Preservation Purposes
The Tax Reform Act of 1986 retains the provisions established by Section 6 of the Tax Treatment Extension Act of 1980 (IRC Section 170) that permit income and estate tax deductions for charitable contributions of partial interest in historic property. Generally, the IRS considers that a donation of a qualified real property interest to preserve a historically important land area or a certified historic structure meets the test of charitable contribution (easements) for conservation purposes. For purposes of the charitable contribution provisions only, a certified historic structure need not be depreciable to qualify. It may be a structure other than a building and may also be a remnant of a building such as a façade, if that is all that remains, and may include the land area on which it is located.
The IRS definition of historically important land areas is contained in the Code of Federal Regulations at 26 CFR 1.170A-1-(d)(5) and includes:
Independently significant land areas including any related historic resources that meet National Register Criteria for Evaluation.
Land areas within registered historic districts. Including any buildings that contribute to the significance of the historic district; and...
Land areas adjacent to a property individually listed in the National Register of Historic Places (but not within a historic district) where physical or environmental features of the land area contribute to the historic or cultural integrity of the historic property.
For taxpayers who itemize deductions, the charitable contributions deduction for partial interest in historic property remains. Under the new alternative minimum tax provisions, the untaxed appreciation in property that is the subject of a charitable contribution is treated as a item of tax preference for gifts made after December 31,1986. (For carryovers of unused charitable contribution deductions made before August 16,1986, untaxed appreciation is not a tax preference item.)
Under the new alternative minimum tax provisions, the full fair market value of a donated preservation or conservation easement on property, which has appreciated since the taxpayer acquired it could be used to reduce the donor’s adjusted gross income for purposes of computation of regular tax liability, but the appreciated portion of the donation must be for purposes of computing the donor’s alternative minimum tax.
California Historical Building Code (Title 24 Part 8)
The California Historical Building Code (CHBC) provides regulations for preservation, restoration, rehabilitation, relocation or reconstruction of qualified historic buildings or properties. These regulations are intended to facilitate alternative solutions for such historic buildings or properties so as to preserve their original or restored architectural elements and features as well as meet safety, access, and energy efficiency needs.
Mills Act and Certified Local Government
In California local governments can choose to provide preservation incentives to historic home owners through the Mills Act. Contact the local government to determine what incentives or loan programs are available locally. Qualified local governments may also apply for grants through the Certified Local Government Program (CLG) administered through our office. The CLG grants assist with local preservation planning and programs.