Historic Homes Rehabilitation Credit
A tax credit voucher system administered by the Connecticut Commission on Culture and Tourism (CCT), provides a tax credit for owners rehabilitating an historic home or taxpayers making contributions to qualified rehabilitation expenditures. The credit may be applied against the taxes administered under Chapters 207, 208, 209, 210, 211, or 212 of the Connecticut General Statutes.
Owner means any taxpayer filing a State of Connecticut tax return who possesses title to an historic home or prospective title to an historic home in the form of a purchase agreement or option to purchase, or a nonprofit corporation that possesses the title or prospective title.
Historic home means a building that:
Will contain one to four dwelling units of which at least one unit will be occupied as the principal residence of the owner for not less than five years following the completion of rehabilitation work;
Is located in a targeted area; and
Is listed individually on the National or State Register of Historic Places, or located in a district listed on the National or State Register of Historic Places, and has been certified by CCT as contributing to the historic character of the district.
Qualified rehabilitation expenditures means any costs incurred for the physical construction involved in the rehabilitation of an historic home, but excludes:
The owner’s personal labor;
The cost of site improvements, unless to provide building access to persons with disabilities;
The cost of a new addition, except as may be required to comply with any provision of the State Building Code or the State Fire Safety Code;
Any cost associated with the rehabilitation of an outbuilding, unless such building contributes to the historical significance of the historic home; and
Any nonconstruction costs such as architectural fees, legal fees, and financing fees.
Targeted area means:
A federally designated qualified census tract in which 70% or more of the families have a median income of 80% or less of the state-wide median family income;
A state designated and federally approved area of chronic economic distress; or
An urban and regional center as identified in the Connecticut Conservation and Development Policies Plan.
Qualifying for the Credit
Prior to beginning any rehabilitation work on an historic home, the owner must submit to CCT:
A rehabilitation plan for a determination of whether the rehabilitation work meets the standards required; and
An estimate of the qualified rehabilitation expenditures.
CCT certifies that the rehabilitation plan conforms to the standards for approval of the rehabilitation and reserves an allocation for a tax credit equivalent to 30% of the projected qualified rehabilitation expenditures.
Following the completion of the rehabilitation of an historic home, CCT verifies the owner's compliance with the rehabilitation plan and issues a tax credit voucher to either the owner rehabilitating the historic home or to the taxpayer named by the owner as contributing to the rehabilitation.
The owner is not eligible for a tax credit voucher unless the owner incurs qualified rehabilitation expenditures exceeding $25,000. The owner must verify that he or she will occupy the historic home as his or her primary residence for at least five years, or that the owner will convey the home to a new owner who will occupy the home as his or her primary residence for at least five
Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07