Colorado's House Bill 1314 Extends Historic Rehabilitation Tax Credits and Expands Eligibility to 30-Year-Old Structures

House Bill 1314 extends Colorado's income tax credit for historic building rehabilitation to 2036 and lowers the eligibility age from 50 to 30. This change encourages the preservation and restoration of newer historic buildings across the state.

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Bill Assisting Expenses for Historic Structure's Rehabilitation

Income tax credits for repairing historic sites, which were scheduled to expire in 2032, can now be claimed till 2036 due to House Bill 1314, which was signed into law by Polis on Friday, May 24. As mentioned, on Tuesday, May 7, the Colorado House of Representatives approved the legislation with a vote of 41-22, and the Senate approved it with a vote of 28-7.

The bill's primary sponsors were Congressmen Meghan Lukens of Steamboat Springs and Matthew Martinez of Monte Vista, both Democrats, and Senators Julie Gonzales of Denver and Perry Will of Newcastle, both Republicans.

Accordingly, the credit will become refundable in 2027, and in 2025, the maximum credit for rehabilitating a residential structure will be increased from $50,000 to $100,000. Both of these changes will take effect immediately. Moreover, the law restricts the credit to expenses incurred within the twelve months prior to the filing of the credit allocation, which is a reduction from the twenty-four months that are now permitted.

In addition, it increases the time that the Colorado Office of Economic Development can reserve the credit until December 31, 2032. The measure eliminates the 5% increase in the proportion of eligible rehabilitation costs spent in restoration in a disaster area that falls under the credit for rehabilitations undertaken in conjunction with a request for the credit submitted on or after January 1, 2025.

Nevertheless, when an application for the credit is submitted on or after January 1, 2026, the credit will only apply to historical rehabilitation expenditures that happened 12 months in advance rather than 24 months in advance. It will also limit an individual's ability to submit a petition for the credit on or after January 1, 2025, about a rehabilitation project that has already been finished.

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Tax Credit on Restoration Projects

Under the Secretary of the Interior's Standards for Rehabilitation, Colorado introduced a new tax credit in July 2015 to rehabilitate historic structures that meet specific criteria. Initially established in 1990, the rehabilitation tax credit is further enhanced and expanded by this credit.

Specifically, it allows taxpayers to minimize the amount of income tax they must pay to the government on a dollar-for-dollar basis. The total restoration costs related to the project are used as a percentage to determine the amount of credit that can be acquired.

On the other hand, anyone interested in applying for these programs should contact the Office of Archaeology and Historic Preservation (OAHP) of History Colorado as soon as feasible. This will guarantee that all of the requirements are satisfied. Also, owners, developers, and architects can seek guidance from the government's specialists regarding the preservation and rehabilitation measures that are most suited for their properties. In certain instances, their team will examine applications for tax credits and provide formal recommendations for approval by the appropriate authorities.

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