Tax Credits for History: How to Save on the Costs of Restoring a Historic Home in Oklahoma
Historic homes are an important part of Oklahoma's cultural heritage. Many of these homes have architectural and historical significance and have the potential to be restored and repurposed as residential, commercial or mixed-use properties. However, the cost of restoring these homes can be substantial, and many property owners are hesitant to take on such a project. Fortunately, the State of Oklahoma offers a number of tax credits that can help offset the cost of restoring a historic home. In this article, we will discuss the process of getting tax credits for restoring a historic home in Oklahoma and the steps you will need to take to take advantage of these credits.
Step 1: Determine if your home is eligible
The first step in getting tax credits for restoring a historic home is to determine if your home is eligible. In Oklahoma, the State Historic Preservation Office (SHPO) is responsible for identifying and listing historic properties that are eligible for tax credits. To be eligible for the tax credits, a home must be listed on the National Register of Historic Places or must be certified as a contributing property to a National Register historic district.
To determine if your home is eligible, you can contact the SHPO and ask for a "Preservation Assessment" of your property. This assessment will include an evaluation of the home's architectural and historical significance, as well as an assessment of its condition.
Step 2: Develop a restoration plan
Once you have determined that your home is eligible for tax credits, you will need to develop a restoration plan. This plan should outline the scope of the work to be done, the cost of the project, and the timeline for completion. The plan should also include details on how the restoration will be done, including the materials and techniques that will be used.
It is important to note that the restoration plan must be approved by the SHPO before any work can begin. The SHPO will review the plan to ensure that it complies with the Secretary of the Interior's Standards for the Treatment of Historic Properties.
Step 3: Apply for the tax credits
Once your restoration plan has been approved by the SHPO, you can apply for the tax credits. In Oklahoma, there are two types of tax credits available for historic home restoration: a 25% state income tax credit and a 20% federal income tax credit.
To apply for the state tax credit, you will need to fill out an application and submit it to the Oklahoma Tax Commission. The application will need to include documentation of the restoration plan, as well as receipts for the materials and labor used in the restoration.
To apply for the federal tax credit, you will need to fill out an application and submit it to the National Park Service. The application will need to include documentation of the restoration plan, as well as receipts for the materials and labor used in the restoration.
Step 4: Comply with the tax credit requirements
Once you have been approved for the tax credits, you will need to comply with certain requirements to maintain your eligibility. For example, you will need to retain the historic character of the property and ensure that any changes made to the property are reversible.
You will also need to retain documentation of the restoration work, such as photographs, receipts, and contracts, for at least five years after the completion of the work. This documentation will be required if you are audited by the Tax Commission or the National Park Service.
Step 5: Claim the tax credit
Once the restoration work is complete, and all the requirements are met, you can claim the tax credit on your state and federal tax returns. The credit will be applied tohe taxes that you owe, and can significantly reduce your tax liability. Keep in mind that the tax credit is not refundable, meaning that if the credit exceeds the amount of taxes owed, the excess will not be refunded to the taxpayer.
In Oklahoma, the state income tax credit can be claimed over a period of five years, while the federal credit must be claimed in the year the work was completed. It is important to consult with a tax professional to ensure that you are claiming the credit correctly and to make sure you are taking advantage of all the benefits to which you are entitled.
It is also worth noting that there may be additional state and local incentives for restoring historic homes in Oklahoma, such as property tax exemptions, grants, and low-interest loans. Be sure to research all the options available to you and take advantage of any opportunities to reduce the costs associated with restoring your historic home.
In conclusion, restoring a historic home in Oklahoma can be a rewarding and fulfilling experience, but it can also be costly. Fortunately, the State of Oklahoma offers tax credits that can help offset the costs of restoring a historic home. By understanding the process of getting tax credits, developing a restoration plan, and complying with the tax credit requirements, you can take advantage of these credits and preserve a piece of Oklahoma's cultural heritage.