KY Historic Preservation Tax Credit

The Kentucky Heritage Council worked closely with the Governor’s office and Preservation Kentucky, Inc. [] to rally preservationists across the state to ensure that the historic preservation tax credit provision of the Governor’s 2005 JOBS for Kentucky Tax Modernization Bill was enacted.  Only properties listed individually or as contributing to a district listed in the National Register of Historic Places are eligible.

From the second round of credits announced in March 2007: 

• 50 projects were submitted from six counties – 17 for the 20% tax credit and 33 for the 30% tax credit (owner-occupied)
  
  
• 45 projects were approved for the credits – and five were determined ineligible (one did not spend enough to qualify, and window replacements were a key issue in the remaining four)

Approved projects represent $71,515,730 of private investment, a significant increase compared to $17,272,803 of private investment during 2006.  With the apportionment formula in place this year and a total cap of $3 million, recipients received 21% of their eligible credit.  The good news is that owner-occupied residential properties represent the largest percentage of applications and most of those represented modest amounts – 14 of the owner-occupied applications were for projects less than $50,000.

Note:  If the $400,000 cap for commercial projects had been in effect this year (a cap that begins with the 2008 round of credits), the total amount of eligible credits awarded would have been $4,237,819.  This indicates that with imposing this individual cap on commercial projects and the $60,000 cap on owner-occupied projects, the result may be manageable without imposing a $3 million cap overall.  For example, if next’s years cap of $400,000 had been applied to commercial projects this year (along with the $3 million overall cap), each project would have received about 71% of eligible credits.