New York Historic Credit Strengthened

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Tax Credit Advisor, September 2009: New York Gov. David Paterson on July 29 signed legislation (A. 9023/S. 6056) strengthening the state’s historic rehabilitation tax credit program.

The act targets the use of the credit to distressed areas and enhances the tax credit for rehabilitation of historic commercial properties.

Established in 2006, New York’s historic tax credit can be claimed by taxpayers for qualified rehabilitation costs for both historic commercial properties and owner-occupied homes.

The Preservation League of New York State, which hailed passage of the new law, said previous limitations in both the commercial and residentialprograms resulted in insufficient incentives to deliver economic and community revitalization to municipalities in need.

At the bill signing ceremony, Deborah VanAmerongen, Commissioner of the New York State Division of Housing and Community Renewal, said: “The rehabilitation tax credits will foster new private and federal investment where it is most needed: our economically distressed downtowns and commercial districts, main streets, and older residential neighborhoods. Further, these incentives will encourage the use or reuse of existing affordable housing resources. I’m delighted that we now have a more powerful tool for revitalizing communities across New York State.”

Gov. Paterson said, “As we move forward in the New Economy, it is critical that we continue to use our state resources to leverage private investment dollars to take our distressed historic areas and return them to vibrant centers of commerce and culture.”

The new law modifies the tax credit for rehabilitation of commercial properties by raising the credit rate to 20% of qualified rehab expenses from 6%, and by increasing the per-project credit cap to $5 million from $100,000. The credit cap for homeowners increases to $50,000 from $25,000.

The act limits both rehab credits to historic properties located in distressed areas, which are census tracts with a median family income at or below the statewide median family income.

The law permits transferability of historic tax credits, and a credit or refund for homeowners who can’t fully utilize the historic credit because of their income level.

The changes take effect on 1/1/10 and sunset at year-end 2014.

A study by New York consultants HR&A Advisors predicts the strengthened historic credit will create 2,000 jobs statewide and generate more than $500 million in economic activity over five years.

(Legislation: http://assembly.state.ny.us/leg)