Abandoned home in Charleston If there is one single truth about a historic restoration or period home renovation project it is that it will “take longer than you estimated and cost more that budgeted. “  This is not due to a lack of diligence in planning and execution but rather it is caused by the unknowns that become obvious as the project unfolds.  Termites, rot, mechanical failure, poor repairs, previous storm damage, all can cause hidden damage over time.  However, help is at hand in the form of two great tax credits available at the state and Federal levels.

There is the Abandoned Building Revitalization Act with credits up to 25% of build cost AND, if your building is on the National Register of Historic Places, there are also state income tax credits of 20% and Federal income tax credits of a further 10% that can be applied.  Add together and you get a whopping potential > 50% tax credit to go towards that delay and overspend on your period home restoration or downtown investment.  

Claiming these credits for historic renovation in Charleston is something that we have avoided until now. A couple of applications and no follow up.  I’ll blame our workload. However, as our historic property portfolio grows, we really need to now give this some focus. Especially as we are undertaking a $1M renovation of a Grade 1 Federally listed historic home in the form of the Gadsden House.

Now there are some pitfalls in all this. Building age, is it in a Federally designated historic district, is the building already or deemed worthy of Federal recognition, is it occupied, is it commercial or residential, has work been completed? The answers to these questions will all have an effect on the outcome.  So, we looked back at our portfolio and have chosen the following properties as examples to use in our first application:

  • 327/329 East Bay – 1790’s – $1M est. renovation, Ansonborough – Federally listed Grade 1, continuously occupied – under renovation
  • 31 Amherst St – 1850 – $310K renovation, East Side – abandoned over 5 years
  • 233 Ashley Av – 1850’s – $260K renovation, Elliotborough – abandoned over 5 years
  • 27 Percy St – 1870’s – $380K renovation, Elliotborough – continuously occupied
  • 95 Broad St – 1770’s – $300K restoration, South of Broad – Grade 2 – continuously occupied
  • 19.5 Line St – 1900’s – $130K renovation, East Side – abandoned over 5 years

Tax Incentive Program

Owner-Occupied Historic Residence 

Income-Producing Historic Building

Mixed Use Historic Building (see note)
20% Federal Historic Rehab Tax Credit   ✔ Partial
10% State Historic Rehab Tax Credit    ✔ Partial
25% State Historic Rehab Tax Credit ✔   Partial

Note: May be eligible for two different programs (residential & commercial) but costs must be recorded by each category. 

Thought : We have a good number of suitable properties and due to pressure of work we are aware at least that we may have missed some time-sensitive opportunities.  However, there is no time like the present and we intend to move diligently through the filing process.

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