Rehabilitation Tax Credit

Loading the player...

DEFINITION of 'Rehabilitation Tax Credit '

A federal tax incentive to encourage real estate developers to renovate, restore and reconstruct old buildings. Buildings placed in service before 1936 are eligible for a 10\% credit, and certified historic structures are eligible for a 20\% credit. The credit applies to the building's rehabilitation costs, but not to the cost of purchasing the building or to repairing sidewalks, parking lots and landscaping. The credit amount increases slightly if the building is also located in a specific disaster area.

BREAKING DOWN 'Rehabilitation Tax Credit '

The taxpayer must also meet requirements regarding the rehabilitation project timeframe and completion date to claim the credit. Enlargement and reconstruction projects are not eligible for the tax credit, and tax-exempt properties also do not qualify. Only the title holder of the property can claim the credit. Some states also offer rehabilitation tax credits to encourage redevelopment.



RELATED TERMS
  1. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  2. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  3. American Opportunity Tax Credit

    A tax credit that enabled more student and parents to pay for ...
  4. Available Credit

    The unused portion of an open line of credit, such as a credit ...
  5. Refundable Credit

    A tax credit that is not limited by the amount of an individual's ...
  6. Credit Limit

    The amount of credit that a financial institution extends to ...
Related Articles
  1. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  2. Taxes

    Tax Credits And Deductions For Parents

    Your children can help you save on your taxes with these credits and deductions.
  3. Savings

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  4. Credit & Loans

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  5. Credit & Loans

    Extreme Credit Repair: Why It Doesn't Work

    Most of these are illegal scams at worst and a waste of time at best. Here are five extreme credit repair techniques we do not recommend.
  6. Credit & Loans

    Build Your Credit Score

    Here are four good ways to build your credit score when you're starting from scratch. Do it right and you'll end up with excellent credit.
  7. Taxes

    Major Tax Credits Expiring In 2013

    Here are the major changes and tips that you need to know before filing your taxes for 2013.
  8. Credit & Loans

    How To Increase Your Appeal To Prospective Lenders

    Making a business eligible for loans/credit cards at the best possible rates requires crafting an excellent credit profile through the smart use of credit.
  9. Credit & Loans

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  10. Financial Advisors

    How Going Green Can Cut Your Taxes

    Investors looking to improve their bottom line via green investing without risk should take advantage of these tax credits.
RELATED FAQS
  1. What are some good alternatives to taking out a line of credit?

    Read more about how opening a line of credit might not be the best answer for you and determine available alternatives if ... Read Answer >>
  2. What are some reasons banks deny applications for checking accounts?

    Understand what a revolving credit account is and what a general line of credit is, and learn the differences between the ... Read Answer >>
  3. What is the difference between a loan and a line of credit?

    Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of ... Read Answer >>
  4. Can a Best Buy credit card help you build credit?

    Learn about how using a Best Buy credit card responsibly can lead to a higher credit score and lower interest rates on mortgages ... Read Answer >>
  5. What information do lenders need when I apply for a credit limit increase?

    Increase your credit limit by making sure your current credit is paid on time and by paying the largest amount you can afford ... Read Answer >>
  6. Can a Walmart credit card help you build credit? (WMT)

    Learn how Walmart credit cards affect your credit score, and get five tips for improving your credit with a Walmart credit ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center