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. Tax Credit

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

    A tax credit that is not limited by the amount of an individual's ...
  6. Non-Refundable Tax Credit

    A tax credit that can't reduce the amount of tax owed to less ...
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. Tax Deductions Vs. Tax Credits
    Taxes

    Tax Deductions Vs. Tax Credits

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center