Commercial Rehabilitations

Rehabilitation Tax Incentives for Income-Producing Properties

Federal and state rehabilitation tax credits create jobs, bolster the tax base, and revitalize existing buildings while preserving the state’s priceless historic character. These programs, administered by the State Historic Preservation Office (HPO) in partnership with the National Park Service (NPS), encourage the conservation and ongoing use of North Carolina’s historic built environment. 

Owners and developers may potentially receive a 20% federal income tax credit and a 15-25% state income tax credit for certified rehabilitations of income-producing historic structures.

How to Apply

  • 1

    Determine Eligibility

    Candidate buildings must be listed in the National Register of Historic Places, either individually or as a "contributing resource" within a National Register Historic District. Contributing buildings within one of the state’s three Certified Local Historic Districts--found in Raleigh, Goldsboro, and Madison--are also candidates. To determine your building’s eligibility status, please contact your Restoration Specialist or find your building on HPOWEB at

    The rehabilitation of the historic structure must be substantial. For income-producing properties, this means rehabilitation expenses must exceed the greater of either a.) the building's adjusted basis value, or b.) $5,000, within a 24-month period or, for phased rehabilitations, a 60-month period.

    All rehabilitation work must meet The Secretary of the Interior's Standards for Rehabilitation. Applications are subject to a joint review by the HPO and the NPS, with final authority resting with NPS. Please visit the NPS' "Before You Apply" website for more information.

    The Secretary of the Interior's Standards for Rehabilitation were developed to determine the appropriateness of proposed project work on National Register-listed properties and have been widely used since 1976. The intent of the Standards is to promote the preservation of a property's historic character via the retention of historic features and materials on the building's exterior and interior. They also encompass related landscape features and the building's site and environment, as well as attached, adjacent, or related new construction.

  • 2

    Application Process

    Property owners are strongly advised to consult with our office prior to the start of work. This will allow time to assess and resolve any aspects of the rehabilitation proposal which could fail to meet the Standards and result in the denial of credits. Please contact Restoration Services Branch Supervisor Mitch Wilds or the Restoration Specialist serving your county.

    And note: The application process has gone digital!

    Property owners are strongly advised to read the latest program instructions from NPS, and to contact Mitch Wilds or the Restoration Specialist serving your county for current application documents.

    Completed applications must be submitted as PDF attachments to for initial review by the HPO, which then forwards all project materials to NPS with its recommendations. NPS reviews projects against the Standards and issues final certification decisions.

    Tab/Accordion Items

    Provides documentation that the building contributes to a National Register Historic District or property. No Part 1 application is needed for a single-building property listed individually in the National Register of Historic Places.

    Consists of detailed descriptions of existing conditions and proposed alterations; overall existing conditions photographs (if not included in the Part 1 application); and construction documents or drawings, as needed, to fully describe the scope of the rehabilitation project.

    Consists of photographs documenting the completed rehabilitation and substantiating that any Part 2 conditions to approval were met.

  • 3

    Claiming the Credit

    Taxpayers should consult their tax advisor, the NC Department of Revenue, and/or the Internal Revenue Service for help in determining tax and other financial implications.

    The credits cannot be claimed against the cost of acquisition, new additions (volume increase), site work, or personal property. Generally, costs incurred for rehabilitating the existing structure will qualify as rehabilitation expenses.

    Property owners may begin claiming the tax credit(s) in the year the building is placed into service.

    The federal tax credits must be claimed over a period of five years, minimum, and may be applied to tax returns one year before, and up to twenty years after, the building is placed into service.

    The state tax credits may be claimed entirely the year the structure is placed in service, or carried forward up to nine years.

    A property is listed in the National Register by a nomination prepared according to detailed state and federal guidelines. Although all nominations are reviewed by the HPO, the final authority on National Register listing is the Keeper of the National Register in Washington, D.C. Most nominations are prepared by private consultants hired by property owners, local governments, or private non-profit organizations. The nomination process typically takes a minimum of six months, and may take much longer. For information about the NRHP and the requirements and procedures for listing, please contact the Survey and National Register Branch of the HPO.