There are four factors that help to determine if your rehabilitation project meets the basic requirements of the program.
Rehabilitation Property is a Building
Although the National Register of Historic Places lists structures, objects, and sites in addition to buildings, this tax credit is only available for buildings.
Meets Significance Requirements
A minimum of one must apply:
- Building is listed on the National Register of Historic Places, or determined by the State Historic Preservation Office of Iowa to be eligible for listing
- Building contributes to the significance of a historic district that is listed, or eligible to be listed, on the National Register of Historic Places
- Building is designated as a local landmark by city or county ordinance
- Is a barn listed on, or eligible for, the National Register of Historic Places or constructed prior to 1937
View the National Park Service database to find out a building’s National Register of Historic Places status. Find out information about how to nominate a property to the National Register of Historic Places.
Meets the Substantial Rehabilitation Test
For commercial buildings, qualified rehabilitation expenditures must equal at least 50% of the assessed value of the building (excluding the land) before rehabilitation, or $50,000, whichever is less.
For non-commercial buildings, qualified rehabilitation expenditures must equal at least 25% of the assessed value of the building (excluding the land) before rehabilitation, or $25,000, whichever is less.
Meets the Secretary of the Interior’s Standards for Rehabilitation
The work meets the Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings.
Before applying, consult your accountant or tax advisor to make sure that this state tax credit is beneficial to you. Certain income and other restrictions may have a bearing on whether an owner is able to use the credit.
Who May Apply
You must be an eligible taxpayer to apply for the state tax credit. An eligible taxpayer is defined as the fee simple owner of the property or someone having a long-term lease which meets the requirements of the federal rehabilitation credit. The applicant may be a nonprofit but may not be a governmental body.
If you are not the fee simple owner or a qualified long-term lessee, you may apply for the tax credit if you meet all of the following qualifications.
- You qualify for the federal rehabilitation credit allowed under Section 47 of the Internal Revenue Code, and
- You have notarized, written permission from the fee simple owner indicating the owner is aware of the application and has no objection, and
- You become the fee simple owner or have a long-term lease which meets the requirements of the federal rehabilitation credit allowed under Section 47 of the Internal Revenue Code prior to entering into an agreement with the Iowa Department of Cultural Affairs
For additional clarification and additional documentation requirements see the Iowa Department of Revenue guidance on Real Property Ownership and Eligibility.