Rehabilitation Tax Credit

AAA

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.

INVESTOPEDIA EXPLAINS '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.



VIDEO

RELATED TERMS
  1. Historic Structure

    A building or other structure (such as a bridge, mine, canal, ...
  2. Energy Tax Credit

    An energy tax credit is given to homeowners who make their homes ...
  3. Unified Tax Credit

    A tax credit that is afforded to every man, woman and child in ...
  4. Non-Refundable Tax Credit

    A tax credit that can't reduce the amount of tax owed to less ...
  5. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  6. Refundable Credit

    A tax credit that is not limited by the amount of an individual's ...
Related Articles
  1. Tax Credit For Plan Expenses Incurred ...
    Entrepreneurship

    Tax Credit For Plan Expenses Incurred ...

  2. Saver's Tax Credit: A Retirement Savings ...
    Savings

    Saver's Tax Credit: A Retirement Savings ...

  3. Get A Tax Credit For Your Foreign Investments
    Taxes

    Get A Tax Credit For Your Foreign Investments

  4. 5 Tax Credits You Shouldn't Miss
    Taxes

    5 Tax Credits You Shouldn't Miss

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center