In South Carolina, developers have several federal and state economic development incentives available that can help make rehabilitation of historic properties more viable.
- Federal Historic Rehabilitation Tax Credit – This credit is available for those costs that an investor incurs when rehabilitating a historic building for income-producing uses. It is equal to 20% of Qualified Rehabilitation Expenses, and can be used to offset a corporate investor’s federal income tax liability. The QRE cannot include the costs of acquiring the land and building. The property must be listed on the National Register of Historic Places, and must not be tax exempt.
- SC State Historic Tax Credit – This credit can be added onto the federal historic tax credit for the purpose of qualifying projects, defining QREs and calculating the credit amount. Generally, it is used to offset the state corporate income tax.
- Federal New Markets Tax Credit – This is available to investors in Community Development Entities for qualifying investments made in businesses located in low-income communities.
- SC State Abandoned Building Credit – This incentive provides either an income tax credit or a property tax credit for a renovation or redevelopment of abandoned building sites operated for income-producing credits. The site must have been certified by the local governing body as at least 66% abandoned, in that it must have been closed to business or nonoperational for five years. There is also a qualifying threshold of expenses based on the population of the municipality or community the project is located in. For example, in a city of 25,000 or more residents, there is a required expense of $250,000.
- Bailey Bill Property Tax Incentive – The governing body of a county or municipality may grant by ordinance certain special property tax assessments to real property qualifying as “rehabilitated historic property” or as “low and moderate income rental property.”
More information on tax credits can be found in the Main Street South Carolina Economic Incentives Toolkit and economic development incentives video online.