State Historic Rehabilitation Tax Credit (SHRTC) — Commercial Program
The State of California offers tax credits for the rehabilitation of eligible historic commercial and income-producing properties.
Below you will find:
-
State Historic Rehabilitation Tax Credit (SHRTC) eligibility requirements
For complete SHRTC information, download and read the 10-page SHRTC Program Regulations.
Program Overview
State Historic Rehabilitation Tax Credit Program
Qualified rehabilitation projects may receive a tax credit of 20% of the qualified rehabilitation expenditures (QREs). Some projects may qualify for a 25% tax credit if certain criteria are met (see Appendix D of the Application Instructions).
Funds for the State Historic Rehabilitation Tax Credit have been allocated into three categories:
- A certified historic structure that is a qualified residence
- A certified historic building with qualified rehabilitation expenditures (QRE) of less than $1 million
- A certified historic building with qualified rehabilitation expenditure (QRE) of $1 million or more
Applications will be reviewed until the allocated funds for that application category are depleted for the year.
A completed Initial Project Application and application fees must be submitted to be considered.
Dual Projects
Federal historic preservation tax credit projects also qualify as state tax credit projects. Projects applying for both tax credits are called dual projects.
Dual projects still in construction are only required to submit the state Initial Application Form and the fee.
Dual projects completed after January 1, 2022 are only required to submit the Completed Project Application form, including all statisticsal information, and the entire fee computed from the final QRE.
No additional requirements beyond the previously submitted federal submission that was transmitted separately are needed.
Project Eligibility
All projects must meet general eligibility requirements:
- Project property must be listed individually or as a contributor to a historic district listed on the California Register of Historical Resources or National Register of Historic Places.
- Federal tax credit projects completed before January 1, 2022, are not eligible to apply for the state rehabilitation tax credit.
- Have a Qualified Rehabilitation Expense (QRE) greater than $25,000 to qualify for the minimum $5,000 credit.
- The fee simple owner or someone with written permission from the fee simple owner only may apply.
Application Forms and Instructions
These application forms are fillable PDFs. Download the form and fill in the fields as directed. Save the completed form and name the file.
Please read the instructions thoroughly and complete the forms.
Incomplete applications will be placed on hold until a completed application is provided.
Application Instructions (v. 5/24)
Application Forms
Initial Project Application Sections 1, 2 and 3 (v5/24)
Section 2: Application Narrative (v5/24)
Section 2: Amendment Form (v5/24)
Completed Project Application Sections 4 and 5 (v5/24)
How to Apply
1. Read the Application Instructions
2. Once your application is complete and you have all the required PDF documents:
3. Email calshpo.tax@parks.ca.gov to request a link to a secure project folder, using “Link request for Tax project” in the subject line. Add the OHP project number to the subject line if known.
In the body of the email, include:
-The requestor's name and company or affiliation.
-The project name, city, and county where the project is located.
-The email addresses of others permitted to access the portal.
4. OHP staff will create a project folder and email the link to the applicant as time allows. This secure project folder remains active for all subscribed users for all project submittals and correspondence.
-First-time users will be prompted by Microsoft to "SEND CODE" as verification of the email address. Click on the SEND CODE button and follow the instructions.
-Use the menu at the top to navigate to and upload project files or folder.
5. OHP staff will receive notification when documents are uploaded.
-Staff will time/date stamp each document and assign the application to a reviewer.
-All uploaded documents are processed in the order in which they are received.
-The received time/date on the stamp reflects the time and date that staff process the application, not the delivery time and date of the upload.
Application Fees
The Office of Historic Preservation charges a fee to review the Initial and the Completed Project applications. The fee amount depends on the project type and can be found in the Application Instructions. Fees must be submitted with the application for the application review to be performed. Fees are nonrefundable unless allocation funds are insufficient.
Frequently Asked Questions
FAQs
What is a Qualified Rehabilitation Expenditure?
Qualified rehabilitation expenditures (QREs) may include expenditures in connection with the rehabilitation of a building or rehabilitation expenditures incurred by the taxpayer for the rehabilitation of the exterior and interior of a building or rehabilitation necessary for the functioning of the building, including, but not limited to, rehabilitation of the electrical, plumbing, or foundation.
For more information about QREs is located on QRE Guidance page.
What is a Dual Project?
Dual projects are projects applying for both the state and federal Historic Tax Credits. Dual projects follow the federal process but submit state applications and fees.
Dual projects qualify for state tax credits when the Part 1 federal application is approved, which places the property on the California Register.
How do I know if my property is on the California Register?
Try searching the databases linked below:
Built Environment Resources Directory (BERD) Use the accompanying Status Codes to determine the status of the property if listed.
California Historical Resources
National Register of Historic Places
If you think your property is listed on the California Register but cannot locate the listing, after searching the above resources, please contact us at calshpo.tax@parks.ca.gov, using subject line “CR listing status request for <property address, city and county>.” In the body of the email, provide the full name of the correspondent, the historic name the building is known by (if any), and the year the building was built, if known. Photos of the property may be attached at the correspondent’s option. OHP staff will reply to inquiries within 5 days.
How do I get my property listed on the California Register or National Register?
Nomination and listing of a property in the California or National Register is a separate regulatory action which must be completed before applying for state tax credit. Please visit the "Procedures for Registration" section of the California Register of Historical Resources page.
The length of the nomination process varies and depends on the completeness of the nomination packet, how responsive the nominee is to requests for additional information, the timing of the application submittal and the volume of nominations received. In general, eligible property nominations take 6-12 months to be added to the California Register.
It is highly recommended that nominees thoroughly read the California Register Checklist for Submission and closely follow instructions.
What does Rehabilitation mean?
In the context of this program, "rehabilitation" is defined in §4859.02 Definition of Key Terms: "the process of returning a building or buildings to a state of utility, through repair or alteration, which makes possible an efficient use while preserving those portions and features of the building and its site and environment that are significant to its historic, architectural, and cultural values as determined by the Office of Historic Preservation."
Can past recipients of the Federal Historic Tax Credit program apply for the State Historic Rehabilitation Tax Credit?
Federal tax credit projects completed or participating in the federal review process on or after January 1, 2022, can apply for the state program. They must submit an Initial Project application with fees to receive approval from OHP and tax allocation from the CTCAC. Completed projects must submit a Completed Project Application with application and processing fees. Since funding for the SHRTC was not available before January 1, 2022, federal projects completed before that time are not eligible to receive funds.
What happens when the funds run out?
As each tax credit funding category is exhausted, the OHP will stop taking applications for that category. The OHP will return any unprocessed applications and fees to the applicant.