The Oregon SHPO currently has two tax incentive programs to encourage the appropriate rehabilitation and maintenance of historic properties. Both are limited to properties that are listed in the National Register of Historic Places.
- Federal Tax Incentive
- State Tax Incentive
Federal Tax Incentive
*** IMPORTANT UPDATE: As of August 15th, paper applications will no longer be accepted as SHPO and NPS are transitioning to an all-electronic submission process that can be found here. Please email joy.sears@oprd.oregon.gov for instructions about submitting Federal Tax Incentive applications.***
Implemented in 1976, the federal government has offered an income tax credit as an incentive for rehabilitating income-producing, historic buildings listed in the National Register of Historic Places. This tax credit program is administered in Oregon by the State Historic Preservation Office (SHPO) in conjunction with the National Park Service (NPS) in Washington, D.C., which makes the final decisions on project eligibility, and the Internal Revenue Service (IRS) who handles the actual tax credit component.
Before applying, consult your accountant or tax advisor to make sure that this federal 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. IRS administers the Department of the Treasury's involvement with the Federal Historic Preservation Tax Incentives Program. The IRS has provided written guidance on these complex federal regulations, which is available as easy-to-read guidance here.
There is a 20% Investment Tax Credit (ITC) available for rehabilitating, National Register listed historic buildings. The ITC is a percentage of the rehabilitation costs and does not include the purchase price. This is a tax credit, not a deduction.
Example: 20% of a $100,000 rehabilitation = $20,000 tax credit
This ITC is available for buildings listed in the National Register of Historic Places, which, after rehabilitation, must be used for commercial or residential rental use. It is not available for the rehabilitation of a private, owner-occupied residence.
Any work on the interior or exterior of the building that structurally stays with the building qualifies for the tax credit.
Examples of work that qualifies: walls, partitions, floors, ceilings, permanent coverings such as paneling or tiling, windows and doors, components of central air conditioning or heating systems, plumbing and plumbing fixtures, electrical wiring and lighting fixtures, chimneys, stairs, escalators, elevators, sprinkling systems, fire escapes, and other components related to the operation or maintenance of the building.
Examples of work that does not qualify:
- Acquisition costs
- Appliances
- Cabinets
- Carpeting (if tacked in place and not glued)
- Decks (not part of original building)
- Demolition costs (removal of a building on property site)
- Enlargement costs (increase in total volume)
- Fencing
- Feasibility studies
- Financing fees
- Furniture
- Landscaping
- Leasing Expenses
- Moving (building) costs (if part of acquisition)
- Outdoor lighting remote from building
- Parking lot
- Paving
- Planters
- Porches and Porticos (not part of original building)
- Retaining walls
- Sidewalks
- Signage
- Storm sewer construction costs
- Window treatments
All work must meet the Secretary of the Interior's Standards for Rehabilitation to be approved. The work must be reviewed by the SHPO and certified by the National Park Service in order to qualify. This is done by completing an application and submitting it to the SHPO along with photographs showing all work areas (interior and exterior) for the entire project even if no work is being undertaken in that space. Owners take a risk if they do work before official written approval from NPS of their plans occurs.
The rehabilitation expenditures must be “substantial" and exceed the greater of either the "adjusted basis" of the building or $5,000.
"Adjusted basis" is the purchase price minus the cost of the land at time of purchase minus any depreciation already taken by the current owner plus cost of any capital improvements made since purchase.
Example (recent purchase): $500,000 (purchase price) - $170,000 (land) = $330,000 (adjusted basis). Rehabilitation expenses must exceed the minimum $330,000 in order to qualify.
Example (long-time ownership): $150,000 (purchase price) - $41,000 (depreciation) - $70,000 (land) + $1,500 (capital improvement) = $ 40,500 (adjusted basis); Rehabilitation expenses must exceed minimum of $ 40,500 to qualify for the credit.
An owner must keep a building at least five years in order to avoid any recapture of the tax credit by the IRS. The recapture amount ranges from 100% of the tax credit if the building was sold within the first year, to 20% of the tax credit if it is sold within the fifth year.
Here are some resources to assist you in this process:
State Tax Incentive
New applications will be accepted starting November 1, 2025. Please revisit this page for more information.