Hey everyone. I wanted to do a quick blog post with an update on our tax credit status. One of our first posts was about the State Residential Tax Credit – a program that pays for 25% of your construction costs and fees (50% if vacant and blighted) with a cap of $25,000 per historic structure. In our case, 25% would be more than the cap, so we are hoping to get the full $25,000, credited towards our taxes in equal installments over the next 5 years.
As previously mentioned, SHPO (State Historic Preservation Office) does not allow the use of spray foam – an order passed down from the National Park Service who governs the national tax credit programs. We had to get creative with our insulation as a result – more on that soon.
In addition to insulation, we just received the response to our Part B application. This application included a thorough description of the existing structure and our intentions for the renovation, along with a picture of each wall in the house keyed to the floor plans. If anyone is interested, I am happy to share a copy of our application.
Our response basically said we were approved, assuming we met the following conditions:
- More information, including photos or drawings, of the proposed gallery on the east elevation must be submitted for approval prior to construction.
- The center demising wall, separating the living and dining room, cannot be removed. The walls on either side of the fireplace must be repaired and retained.
- The mantles seen in photos 13, 26, and 30, must be repaired and reused. The mantle in photo 26, which is located in the proposed bathroom, can be reused in the living room which does not have and existing mantle.
- All of the fireplaces must remain covered. The brick cannot be exposed.
The first one was not a shock, but the other three definitely went against what we planned to do and have done to date. Thankfully we did discover an existing door in the front demising wall (picture below) and we saved the mantles even though we weren’t planning on reusing them. Our friend Joshua spent a lot of time removing the plaster from the existing fireplaces and now we will be covering them up with gypsum board (sorry about that Joshua!). But all in all, totally worth the $25,000 to comply. Next step is to submit an amendment to our Part B with drawings of the back awning and photos of the existing opening between the living and dining room. After that, we just have to submit finished project photographs and invoices on construction costs to get final approval.
The timing with the response was good – we are starting sheetrock next week. Any work you do prior to getting the response is at risk, so definitely get your applications in as soon as possible.
Speaking of timing, here is another tax incentive program that should be considered before you start improvements on a project:
Restoration Tax Abatement
This essentially keeps your property at its current assessed file (as far as the taxes are concerned) for 5 years as an incentive for people to invest in properties.
The website is pretty straightforward in laying out the process, but if you have any questions you can contact Becky Lambert who is the program administrator for Louisiana Economic Development. email@example.com or 225-342-6070.
For those of you in New Orleans, you will need to get a local certification from the Mayors Office here in NOLA that the property falls within one of the districts or development zones (essentially all of New Orleans does). The contact for that is Tracey Jackson: firstname.lastname@example.org or 504.658.4955.