Navigating Tax Credits for Historic Properties

This simple primer is a brief overview of the material covered in New Mexico Historic District Tax Credit workshops. These financial incentives apply to those who have property in the state's Historic Districts, Historic Overlay Zones, and Arts and Culture Districts.

State Credits

• The State of NM has a tax credit program that will allow you to reduce your tax burden over 5 years. They will allow you to deduct 50% of the cost of rehabilitation of your building, up to a maximum of $25k in the historic districts and $50k in the Arts and Culture District.

Federal Credits

• This COMMERCIAL tax credit program allows business owners to take tax credits of up to 20% of the cost of rehabilitation for your historic structure. This is a complicated and time-consuming, albeit valuable, process that works great when a rehabilitation is planned.There is a $5k minimum investment to be considered for this program and National Park Service approval is required for all alterations.

Rehabilitation Loan Program

• This state program provides low-interest loans for historic rehabilitation, with interest rates at about 3%. The entire balance must be paid in 5 years, and the home or business must be maintained as rehabilitated for 7 years after participating in this program. You must already have a relationship with a bank established, as this program acts as a sort of partial-loan guarantee - very appealing for those who might be building their credit.

Eligible Repairs:

• Facade repairs
• Replace mechanical system
• New roof
• Plaster
• Plumbing
• Wiring
• Window rehabilitation (repairs + storms = NOT replacement)
• Protecting archaeological site(s)

Please consider using these great programs to help you to restore your contributing historic structures!

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