The certified historic residential structure credit is available for "rehabilitation expenses" to a "certified historic residential structure," as those terms are defined below. The credit is available if the expenses are incurred in taxable years beginning after 2002 and if the property is placed in service after June 30, 2003.
The credit is 25% of rehabilitation expenses, which must exceed $15,000 within a 36-month period. The credit has to be taken in equal installments over a 5-year period. Any unused amount from an installment can be carried forward for five years.
A taxpayer may not claim more than one credit on the same certified historic residential structure within 10 years. A "certified historic residential structure" is an owner-occupied residence that is: (a) listed individually in the National Register of Historic Places; (b) considered by the State Historic Preservation Officer to contribute to the historic significance of a National Register Historic District; (c) considered by the State Historic Preservation Officer to meet the criteria for individual listing in the National Register of Historic Places; or (d) an outbuilding of an otherwise eligible property considered by the State Historic Preservation Officer to contribute to the historic significance of the property.
An "owner-occupied residence" is a building or portion of a building in which the taxpayer has an ownership interest, in whole or in part, in fee or by life estate or as the income beneficiary of a property trust, that is, after being placed in service, the residence of the taxpayer and is not: (a) actively used in a trade or business; (b) held for the production of income; or (c) held for sales or disposition in the ordinary course of the taxpayer's trade or business.
A property is "placed in service" when the rehabilitation is completed and allows for the intended use. "Rehabilitation expenses" are expenses incurred by the taxpayer in the certified rehabilitation of a certified historic residential structure, and must be paid before the credit is claimed.
They include expenses for: (a) preservation and rehabilitation work done to the exterior of a certified historic residential structure; (b) repair and stabilization of historic structural systems; (c) restoration of historic plaster; (d) energy efficiency measures except insulation in frame walls; (e) repairs or rehabilitation of heating, air-conditioning, or ventilating systems; (f) repairs or rehabilitation of electrical or plumbing systems exclusive of new electrical appliances and electrical or plumbing fixtures; and (g) architectural and engineering fees.
They do not include: (a) the cost of acquiring or marketing the property; (b) the cost of new construction beyond the volume of the existing certified historic residential structure; (c) the value of an owner's personal labor; or (d) the cost of personal property.
The State Historic Preservation Officer can be contacted at the South Carolina Department of Archives and History.
Before any work begins, the taxpayer must allow the State Historic Preservation Officer to review all repairs, alterations, rehabilitation, and new construction on the certified historic residential structure and the property on which it is located.Repairs or alterations must be consistent with the Secretary of the Interior's Standards for Rehabilitation.
After the work is completed, the taxpayer must obtain certification from the State Historic Preservation Officer verifying that the completed project was rehabilitated in accordance with the Secretary of the Interior's Standards for Rehabilitation.
For a period of up to five years, additional work done by the taxpayer must be consistent with the Standards for Rehabilitation. The State Historic Preservation Officer may review additional work and has the right to inspect. Additional work that the State Historic Preservation Officer deems inconsistent with the Standards for Rehabilitation will result in forfeiture of any unused credit amount, including any amounts carried forward.
The taxpayer may appeal to the State Review Board to review any determination by the State Historic Preservation Officer.