From July 1, 2015 through December 31, 2019, Colorado will offer taxpayers two different programs that offer income tax credit for the rehabilitation of qualified historic properties.
The Colorado Job Creation and Main Street Revitalization Act of 2014 (CRS 39-22-514.5) offers a
20 – 30 percent tax credit for the rehabilitation of a qualified commercial (income-producing) property, as well as a 20 – 25 percent credit for the rehabilitation of a qualified residential (owner-occupied) property.
The Historic Preservation Tax Credit Act of 1990 (CRS 39-22-514) offers a 20 percent tax credit for the rehabilitation of any qualified historic property.
WHICH CREDIT TO USE?
Most taxpayers will want to take advantage of the Colorado Job Creation and Main Street Revitalization Act of 2014 (the 2014 credit) because it offers a higher return on expenditures (up to 30%), a higher per-project credit cap on commercial properties (up to $1 million in tax credits as opposed to $50,000), and greater flexibility (tax credits for income-producing properties can be sold to other taxpayers without penalty).
The 2014 credit for commercial properties has a limited availability; each year the state sets aside funding ($2.5 million in 2016 and $5 million in 2017, 2018, and 2019) for this credit, but when the funding is exhausted, no further credits can be given. By contrast, the old 1990 credit is available to all property owners at all times. Owners of commercial properties who are unable to take advantage of the 2014 credit can still apply for the 1990 credit and receive up to $50,000 in credits for their project.
Under both the 2014 and 1990 credits, eligible properties must be:
At least 50 years old, AND;
Historically designated by being:
o Listed on the National Register of Historic Places
o Listed on the Colorado State Register of Historic Properties
o Listed as a Historic Landmark by a Certified Local Government (CLG)*
o Designated as a "contributing structure" in a historic district that is listed on the National Register, State Register, or landmarked by a CLG
The 1990 credit limits the program to:
Property owners, or
Tenants with a lease of at least five years