The Homeowner's Guide to Historic Preservation Districts and Tax Credits
Owning a historic home is more than an aesthetic choice — it’s a strategic financial opportunity. And when it comes to unlocking the full value of available tax credits, you don’t have to figure it out on your own.
At Kiel Thomson Company, we guide homeowners through the entire historic tax credit process — from eligibility review to final certification. For a flat fee, we manage everything from paperwork to photo documentation, ensuring your application is thorough, accurate, and positioned for approval.
While many assume that restoring older homes is more expensive than building new, generous tax credit programs can significantly offset rehabilitation costs. For homeowners who take advantage of these incentives, the economics of restoration become not only feasible — but often favorable.
Why Restoration Is More Attainable Than You Think
The idea that historic homes are cost-prohibitive to renovate is a common misconception. In reality, many states offer Historic Rehabilitation Tax Credits that cover a substantial portion of qualified restoration expenses. These credits help reduce your out-of-pocket costs while increasing long-term property value — all while preserving the architectural character that makes your home special.
In some states, owner-occupied residential properties may qualify for up to 30% in state tax credits, with an additional 20% federal credit available for properties listed on the National Register of Historic Places. That’s a potential 50% reduction in eligible restoration costs.
A Look at the Numbers
Let’s break down a hypothetical project with $150,000 in qualified rehabilitation expenses:
30% state credit: $45,000
20% federal credit (if eligible): $30,000
Total credits: $75,000
Effective project cost after credits: $75,000
When structured correctly, restoring a historic home can cost no more than new construction — and often delivers significantly more value in both character and quality.
What Makes a Project Eligible?
To qualify for these incentives, your home generally needs to meet the following criteria:
Be individually listed or contribute to a National Register Historic District
Be your primary residence (for state credits)
Undergo a substantial rehabilitation (typically over $20,000)
Complete all work within a 24-month period
Comply with the Secretary of the Interior’s Standards for Rehabilitation
These standards focus on preserving historic materials and design elements while allowing for modern updates.
What Expenses Qualify?
Qualified Rehabilitation Expenses (QREs) typically include:
Foundation, framing, and roofing repairs
Restoration of original windows, doors, and trim
Updates to HVAC, plumbing, and electrical systems
Period-appropriate kitchen and bathroom renovations
Masonry, plaster, and floor restoration
Non-invasive insulation improvements
What doesn’t qualify? Furnishings, landscaping, additions, and property purchase costs are generally excluded.
Understanding the Application Process
The tax credit application is completed in three parts:
Part 1: Evaluation of Significance
Confirms that your home qualifies as historic.
Part 2: Description of Rehabilitation
Outlines your project scope — including materials, photos, and plans — for approval before work begins.
Part 3: Certification of Completed Work
Verifies that the finished work aligns with the approved scope and preservation standards.
Applications are reviewed by your state’s historic preservation office, and for federal credits, the National Park Service. Detailed documentation and photography before, during, and after construction are essential.
Planning for Success
With Kiel Thomson Company as your partner, you’re not just getting a builder — you’re gaining an experienced guide through the historic renovation process. Our team ensures that your project aligns with credit requirements from day one.
To prepare:
Start early: Applications should be submitted before any work begins
Photograph everything: Interior and exterior, every angle
Hire preservation-savvy professionals: We work with architects and consultants who understand these standards
Keep detailed records: We’ll help organize invoices, receipts, and material specifications
More Than a Home — A Legacy
When thoughtfully restored, a historic home becomes more than a place to live — it becomes a long-term investment in craftsmanship, sustainability, and architectural heritage.
Benefits include:
One-of-a-kind charm and lasting beauty
Increased resale value and neighborhood appeal
Sustainable construction practices through reuse
A personal connection to local history
With the right strategy — and the right partner — preserving your home’s story doesn’t just make emotional sense. It makes financial sense, too.
Interested in pursuing historic tax credits for your renovation? Let’s talk. We’ll walk you through every step, ensure your paperwork is in order, and help you bring your vision to life — with confidence and care.
