Under the RITC program, certain expenses incurred in connection with rehabilitating an old building, which is income-producing, are eligible for a tax credit.  There are two rates - 20% for a historic building and 10% for a non-historic building, with different qualifying criteria for each rate.

Twenty Percent (20%) Tax Credit:  

  • Building must be listed on the National Register or be a contributing building to a Certified Local District (a locally designated historic district that has been certified by the National Park Service).
  • Building must be used for income producing purposes.
  • Rehabilitation work must be in accordance with the Secretary of the Interior's Standards for Rehabilitation.
  • Project must meet “substantial rehabilitation test” –amount spent on rehabilitation must exceed the adjusted basis of the building or $5,000, whichever is greater.  
  • Post-rehabilitation building to be owned by same owner and operated as income-producing property for 5 years.

Ten Percent (10%) Tax Credit:

  • Building must be built before 1936 and be non-historic.
  • Building cannot be used for rental residential purposes.
  • Building must meet Wall Retention Requirement:  (i)50% or more of the building’s external walls remaining as exterior walls; (ii) 75% or more of the building’s external walls retained as exterior or interior walls; and (iii) 75% or more of the building’s internal structural framework remaining in place.
  • Project must meet “substantial rehabilitation test” - amount spent on rehabilitation is greater than adjusted basis of the building and is at least $5,000.
  • Post-rehabilitation building to be owned by same owner and operated as income-producing property for 5 years.

The Pennsylvania Historical and Museum Commission serves as the State Historic Preservation Office and administers the RITC program in partnership with the National Park Service and the Internal Revenue Service. 

Is your rehabilitation project eligible for RITCs?