Massachusetts and Pennsylvania State Historic Tax Credit Impact on Rehabilitation Projects

Are you looking to invest in historic property rehabilitation in Massachusetts or Pennsylvania? The recent increase in State Historic Tax Credits (HTCs) in both states offers a significant financial incentive to revitalize historic buildings. Continue reading to learn how these tax credits can help you preserve historic buildings while also creating valuable real estate assets. 

Massachusetts State Historic Tax Credit 

In August 2024, Massachusetts Governor, Maura Healey signed legislation, HB. 4977, doubling the State Historic Tax Credit (HTC) cap to further encourage the investment in rehabilitating historic properties. 

The increase from $55 million to $110 million annually is part of a larger initiative to preserve and rehabilitate over 65,000 homes in cities that have an abundance of historic buildings well-suited for redevelopment into affordable housing. The new cap is expected to significantly impact the Gateway Cities, which have mid-sized urban centers with historic buildings that could become multifamily rental projects. 

The bill allows the HTC to provide a tax credit of up to 20% of qualified rehabilitation expenditures (QREs) on a historic property. It also proposes several other incentives, including a tax credit for converting commercial properties, a tax credit for homeownership, a $110 million fund to support middle-income housing, and zoning reforms. 

These credits may be used alongside other funding options as well, such as the Low-Income Housing Tax Credit (LIHTC), to help make affordable housing projects financially feasible. 

Pennsylvania State Historic Tax Credit 

As part of Senate Bill 654, Pennsylvania’s State HTC annual cap was also increased in August 2024, raising the cap from $5 million to $20 million and allowing any unused amount from a previous year to be used on a first-come, first-served basis. 

The increased funding is expected to make historic rehabilitation projects, especially in affordable housing, also more financially viable for developers. Developers can now take on more and larger projects as they will be eligible for funding. 

The credit helps reduce renovation expenses, facilitating the preservation of historic buildings while addressing the housing needs of low-income residents. 

Ready to Start Your Historic Rehabilitation Project? 

If you’re ready to take advantage of State Historic Tax Credits on a rehabilitation project but don’t know where to start, EisnerAmper professionals can help guide your project forward. Contact us today to discuss how we can support you.