Aldermen & NSOs   City Programs & Services   Environmental   Financing   Green Rehabbing   Insurance   Legal   

Links We Love   Permits   Phone Numbers   Preservation Briefs   Real Estate   Tax Credits   Title Search

Whew! We've been working really hard to present
the reasonably complicated tax credit information
in an organized and understandable format and
we think we might finally have something for you.
So, here goes...

For the purposes of our discussion here, there are basically three
tax credit programs that the majority of property owners might
take advantage of:

• Neighborhood Preservation Act
• State Historic Tax Credit
• Federal Historic Tax Credit
  

Mini glossary of terms to review before we get started:

• basis: what you paid for your property
• adjusted basis: value of the building [minus] the land value [plus] improvements [minus] depreciation
• income-producing: basically, property that brings an income, i.e., residential or business rental
• Certified Local District: a district created by local ordinance and certified by the U.S. Department of Interior as substantially meeting National Register criteria  list
• National Register District: a district that is listed in the National Register of Historic Places  list
• contributing building: it might be easier to state what is NOT a contributing building, but... Basically, when a district is created, a survey is done to determine which buildings contribute to the architectural significance of that district. Surveyors look at how many buildings there are and the percentage of "architecturally significant" buildings to other properties in order to determine if the district has merit and then, which buildings qualify. In order to qualify, a building typically has to be at least 50 years old and has to have been constructed during the period of significance for the district. It cannot [at least on the exterior], have been so significantly altered that it has lost its historic integrity.
  

Photography
At the outset, let us say that across the board, with any of these programs, we recommend the applicant take plenty of pictures PRIOR TO ANY WORK TAKING PLACE. Photographic documentation must cover all significant architectural features on the interior and exterior, as well as at least two photos from opposing corners in each room. This refers to both the “before” and the “after” pictures.

The photos must be 35mm prints and we suggest you get several reprints. You'll need to submit two or three sets, depending on what programs you're applying for and that doesn't include copies for your records. Please remember, digital photos and color copies are not acceptable.

For more information, follow the details laid out on page 13 of the Missouri Department of Economic Development's 16-page PDF.

Applications
Need we say it? Yes, we figure we must: Make absolutely sure, when sending in your application that you keep copies of EVERYTHING: the applications, the drawings and extra sets of pictures. You should be completely prepared in case someone calls you with questions on your project or, if the unthinkable happens, and your application gets lost.

back to top

------------------------------------------------------------
The Neighborhood Preservation Act [NPA]
is a state-run program operated by the Missouri Department of Economic Development. This program, typically known as "The Lottery," is determined by census and is available to property developers and owner-occupants. For our purposes, the entire city of St. Louis is considered a qualifying or distressed community. This program
has a limited time frame in which applications are accepted.
They usually begin accepting in August sometime and usually
close it down in November. Those that are accepted are generally notified by letter early in the new year. Read Missouri statute.

Within this program there are three ways one can apply:
1) rehabilitation: eligible [not distressed] and qualifying [distressed] areas
2) substantial rehabilitation: [distressed]
3) new construction: eligible [not distressed] and qualifying [distressed] areas

Use this chart to understand the appropriate tax benefits for your property.

Non-profits are excluded from this program. A non-profit can form a for-profit entity to qualify - consult a tax professional for more information.

More NPA info
Download NPA guidelines from the State of Missouri [PDF]
NPA applications [Word and PDF versions available]
Determine if your property is eligible click on “enter a street address” and enter the property address. Write down the census tract number and block group number and look up the census info by county and click on “Senate Bill 20 Qualifying Areas by County.” [PDF]

back to top

------------------------------------------------------------
Historic Preservation Tax Credits
Whether you apply for the State, Federal or both, certain rules apply. These rules are dictated by the Secretary of the Interior’s standards for the treatment of historic properties.  link

Missouri State Program
To qualify:
• property must be individually listed on the National Register of Historic Places
OR
• property must be in a Certified Local District or National Register District AND needs to be a contributing building
AND
• you must spend at least 50% of the basis on improvements

If you are presently in an area that is being surveyed to create a district, you may be eligible to apply retroactively AFTER the district has been established if you follow the guidelines for the Secretary of the Interior's standards. Those standards are broadly defined so as to include all buildings in the U.S.

To learn more about a "hypothetical" project, we recommend calling a tax credit consultant or one of the state reviewers. [We say hypothetical here because no one will be able to give you an absolute "yes" or "no" regarding the specifics of your project at an early planning stage. But by consulting and asking questions, you should be able to get some feedback and a general idea if your project could have concerns allowing some revisions at a stage when it's still relatively easy to change things.] If you are within an established district, it is possible to schedule a site visit [consult a tax credit consultant as to the best timing for a visit], however you should understand that due to budget constraints, these visits cannot be guaranteed. See sidebar for contact information.

To apply: The application process is broken down into three parts, Parts 1A & 1B are normally submitted at the same time.
• Part 1A: Preliminary Application: this has applicant's information, preliminary estimated costs and other basic project info
• Part 1B: Rehabilitation Information: with 2 copies of this form you'll send:
-- 2 sets of “before” pictures
-- 2 copies of your existing floor plan
-- 2 copies of your proposed floor plan
• Part 2: Final Certification: submitted when the project is complete. With 2 copies of this form, you'll send:
-- 2 copies of an alien certification form [signed in front of a notary]
-- 2 copies of MO HTC-E form OR a spreadsheet but the signature page from MO HTC-E must accompany the spreadsheet and must be notarized. You should be prepared to provide back-up documentation to justify costs, i.e., receipts, invoices, cancelled checks or some other form of documentation of your eligible expenses.* Expenses are eligible under the terms of the program and must be legitimately tied to the project.
-- 2 copies of a sign off from local municipality certifying applicant has no outstanding building violations
-- 2 sets of “after” pictures

Program benefits:
• You can claim 25% of your eligible expenses. As a general rule, these type of items are allowable: architects fees, materials & labor costs, and utilities & mortgage interest during the time of construction. Items generally not covered are things that are considered not part of the building: fencing, carpet, landscaping and appliances, to name a few.
• Credits are applied to your Missouri State Income Taxes and can be carried back three years and forward 10 years [counting the year you are in, that would be a total of 14 years]
• You will not receive the credits until the project is complete
• Credits are transferable
• No application fee

*Another way to document expenses is to hire a CPA or public accounting firm that does auditing, have them review your project expenses and provide that review as your documentation. Renovations with a total project cost exceeding $250,000 are required to be independently audited by a professional.

back to top

Federal Historic Preservation Tax Credit Program
To qualify: This program is open to income-producing properties
• rental property
• property used for your business
AND
• property must be individually listed on the National Register of Historic Places
OR
• property must be in a Certified Local District or National Register District
AND needs to be a contributing building
AND
• you must spend 50% of the adjusted basis on improvements

If you are applying for this program, you must retain ownership of the property for five years from the date tax credits are issued. Homeowners typically cannot take advantage of this program unless they are owner/occupants of a multi-family and use the other units as income producing. In this case, credits could be obtained on the portion of the interior that's income producing and a pro-rated portion of the allowable exterior improvements like roofing and tuckpointing.

To apply: This application process is also broken down into three parts, aptly named, Parts 1, 2 and 3.
• Part 1: Preliminary application [Evaluation of Significance]: basically you give the address of the property, a description of the building's exterior and a statement of its significance, and ask that they certify that it is in a qualifying district and that the property contributes to that district.
• Part 2: Rehabilitation information Historic Preservation Certification Application. With 2 copies of your application and a $250.00 preliminary application fee [consider this a down payment of the total fee], you'll also supply:
-- 2 sets of “before” pictures
-- 2 copies of the existing floor plan
-- 2 copies of the proposed floor plan
-- 2 copies of survey maps [available from the Landmarks Association or from the Department of Natural Resources in Jefferson City, see sidebar]
-- 2 copies of Whipple or Sanborn fire insurance maps [housed at Missouri History Library at 225 South Skinker, see sidebar]

• Part 3: Final Certification Information: when your project is complete, you will submit:
-- 2 copies of Federal application Part 3
-- 3 sets of “after” pictures
-- the remaining portion of the application fee
The application fee is based on the total eligible project costs and the balance will be paid at this time. You will have received a letter from the Federal Tax Credit office prior to this time, stating the amount of the remaining portion.

And finally, if your project exceeds $250,000, you must have an audit by a CPA. This applies whether you're submitting an application for the State or Federal programs.

back to top