by Becki Gray
Former Senior Vice President, John Locke Foundation
The first tax credits for restoration or renovation of historic buildings started in 1976. The federal government issued credits, so did state governments. Even local governments got in on the action. . Recognizing that NC’s tax credit for historic restoration was a special treatment, unfair to other tax payers and a bad idea the General Assembly repealed the state credit effective at the end of 2014. But under pressure from developers and then Governor Pat McCrory and his Dept of Cultural Resources Sec., Susan Klutz, NC re-authorized the state credit in 2016.
The credit has gone primarily, not to individuals revitalized old neighborhoods but to companies and corporations who are getting numerous other tax credits and tax payer funded breaks. In addition, the credits come with plenty of catches. Everything from building materials true to the age of the neighborhood or building to the kind and custom color of paint to requirements for plantings, fencing and windows – regulations make restoration very expensive. Most first time home owners or low income do-it-yourselves are repined out of the market. The tax credits benefit wealthy restorers and developers with a cost to all taxpayers. Of course the development community is fighting the repeal.
One of the little reported but very beneficial provisions in the GOP tax plan is eliminating the 20% federal tax credit. This recommendation comes from a president who’s restoration of the DC Post Office into the new Trump International Hotel netted him $40 million in federal historic restoration tax credit. I assume there were additional local credits as well.
There is a lot of good stuff in the GOP tax plan. Add elimination of the historic restoration tax credit to the list.