New Jersey Developers and Homeowners Could Be Eligible for Tax Credits Under The Historic Property Reinvestment Act
New Jersey developers and homeowners could be eligible for tax credits under new legislation that seeks to encourage the rehabilitation and preservation of historic properties. If the legislation becomes law, New Jersey would join 35 other states that already have historic rehabilitation tax credits in place.
The Historic Property Reinvestment Act (Senate Bill 2031) establishes separate tax credits for businesses and homeowners. In both cases, the credits would cover up to 25 percent of the cost of rehabilitating New Jersey historic properties. The tax credit for homeowners is capped at $25,000 per property during a ten-year period; meanwhile, the one for businesses is not capped. The homeowners’ tax credit applies against homeowners’ gross income tax liabilities, while the business tax credit applies against corporate business tax and insurance premium tax liabilities.
Properties Qualifying for Historic Preservation Tax Credit
Properties listed on the National Register of Historic Places or the New Jersey Register of Historic Places or designated (or located in a district designated) by the Pinelands Commission as a historic resource are eligible for the credit. Properties located in a historic district must also be designated by the State Historic Preservation Office (SHPO) or other agency as contributing to a district’s historic significance. Alternatively, historic properties may be individually identified (or located in a district composed of properties identified) for protection as a significant resource in accordance with criteria established by the appropriate municipality and approved by the SHPO. Such properties must also be certified by the SHPO as contributing to the district’s historic significance.
Requirements to Obtain Historic Property Tax Credit
Under the Historic Property Reinvestment Act, a homeowner seeking a tax credit must spend no more than 60 percent of the cost of rehabilitation on interior rehabilitation and must own and occupy the qualified property as the homeowner’s principal residence for 12 consecutive months following the completion of the rehabilitation. Moreover, rehabilitation expenditures must be at least 50 percent of the equalized assessed value of the structure for local real estate tax purposes as indicated on the most recent property tax bill for the property prior to the start of the rehabilitation.
A business seeking the tax credit must, during a selected 24-month or 60-month rehabilitation period, have eligible rehabilitation expenditures of the greater of $5,000 or the property’s adjusted basis of the structure used for federal income tax purposes. The bill provides that the cumulative amount of tax credits approved cannot exceed $15 million in the first fiscal year, $25 million in the second fiscal year, $40 million in the third fiscal year, and $50 million in the fourth fiscal year and thereafter. The bill requires that in any fiscal year in which tax credits are issued, at least 25 percent of the total monetary amount of tax credits approved be granted for the rehabilitation of qualified properties by homeowners and at least 65 percent of the total monetary amount of tax credits approved be granted for the rehabilitation of qualified properties by business entities.
The Senate State Government, Wagering, Tourism and Historic Preservation Committee recently advanced the bills. We will keep you posted as the legislation proceeds through the New Jersey legislature. In addition, Scarinci Hollenbeck’s environmental & land use and commercial real estate attorneys are available to advise owners of historical properties about the bill’s potential benefits.
If you have any questions, please contact us
If you have any further questions, feel free to reach out to me, William C. Sullivan, Jr., at 201-806-3364.
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
