The Virginia Department of Historic Resources (VDHR) administers the Virginia State Tax Credit, which does allow for owner-occupied properties to participate, as well as income-producing properties, if they meet the substantial rehabilitation requirements. The state credit
is 25% of eligible rehabilitation expenses. In order to qualify under the Virginia State Tax Credit program as a certified historic structure, the property must be:
1) Individually listed on the Virginia Landmarks Register, or
2) Certified as eligible for listing, or
3) Certified as a contributing structure in a district that is so listed.
Rehabilitation costs for owner-occupied structures must be at least 25% of the assessed value of the building. For income producing properties, rehabilitation costs must be at least 50% of the assessed value of the building. Similarly, additions and enlargements are not eligible.
Example: In the North Alfred Street example above, where the building’s assessed value is $250,000, to be eligible for tax credits, the cost of improvement/rehab work has to exceed $62,500 for an owner-occupied residence and would have to exceed $125,000 for an income-producing property.