Updates ~ Save the Historic Preservation Residential Tax Credit!

The Residential Historic Rehabilitation Tax Credit has assisted homeowners throughout West Virginia to repair, retain, and improve quality housing for families of all income levels.  The purpose of the credit is to provide the needed incentive to repair older homes (including condos) listed individually or in a National Register historic district and to help individual homeowners afford this material rehabilitation.  It also encourages work that meets the “Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings” by providing a 20% tax credit for qualifying expenditures including roof, window, and siding replacement and the upgrade of heating systems.  

If HB 2916 and SB 436 are passed, this tax credit would be eliminated beginning July 1, 2013.

UPDATES ~ Currently both bills are in committees with HB 2916 in the House Finance Committee (http://www.legis.state.wv.us/committees/house/HouseCommittee.cfm?Chart=fin)  and SB 436 in the Senate Government Organization Committee (http://www.legis.state.wv.us/committees/senate/SenateCommittee.cfm?Chart=govo).  Neither of the bills have been added to the agenda of the respective committees, and the bills must be out of committees by March 31st to ensure three full days of readings  – which means that if the bills do not leave their respective committees by March 31, the bills have no chance of being passed into law this session.  You can contact the respective committee members, at the above links, to show your support for the tax credit.

Why is the residential tax credit so important?

        • The state homeowner historic tax credit is one of the few benefits for private homeowners and a key incentive in promoting rehabilitation of historic properties and stabilizing communities.  It preserves the character of our nation’s existing neighborhoods and historic districts thereby reusing public funds and reducing expenditures on new infrastructure.

         

        • Homeowner tax credits contribute to economic development by bringing investment back into older downtowns and small towns, encouraging proper rehabilitation using highly-skilled labor, and increasing sales of building products – all of which create state tax revenues.

         

        • West Virginia has been in the forefront of historic preservation activities for years.  In 1999, we were among the first to enact the residential tax credit for rehabilitation, and we have now been joined by 31 other states, including Pennsylvania, Ohio, Virginia, and Kentucky, that offer credits of 20-30%.  Without this tax credit, homeowners will have a new incentive to invest and move to neighboring states.

         

        • In the 11 years that West Virginia has allowed this credit, it has leveraged $10,342,504 in construction value from 67 projects.  Most of these projects are from middle class families, many of whom could not have afforded to do their rehabilitation without this help.

         

        • The tax credits to date have averaged less than $188,047 per year.  This amount is less than the 2006 average amount of $203,120 for actual tax credits possible per year.  Eliminating this credit would be a very minor benefit to tax collection, but would lose a significant tool in encouraging preservation in our communities.  Additionally, not all projects use all of their tax credits.   

         

        • The administrative burden of this credit is minor.  The State Historic Preservation Office has one staff person who administers the program as a small portion of her duties, and this work directly contributes to the mission of the agency.

         

        • It generally takes about 2 or 3 years for large rehabilitation tax credit projects to be completed.  Then it takes anywhere from 6 to 12 months for the certification to be completed and the tax credits to be used.  The lengthy, labor-intensive rehabilitation process allows West Virginia to offer an incentive that creates jobs and produces tax revenues now, and pay out the state investment years later.

Although the bills are not up for vote yet, you can still make your voice heard by contacting your State Delegates and Senators to make them aware of this threat.   You can show them your support for the tax credit by asking them to vote NO to HB 2916 or SB 436 if they are to come up in this session.  You can call their office, send emails, or faxes.

Contact information for state senators is here: http://www.legis.state.wv.us/Senate1/roster.cfm

Contact information for state delegates is here: http://www.legis.state.wv.us/House/roster.cfm

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