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Tax Breaks Promote Historic Preservation

May 11, 2018

Building renovations are expensive, but a recent Wilson Downtown Development seminar highlighted ways investors can use historic tax credits to offset construction costs. “The benefits of this tax credit (for approved projects) is a 20 percent federal credit and, in this county, 20 percent credit from the state, so if you spend $100,000, you are eligible for a tax credit of $20,000 from the federal government and $20,000 from the state,” said David Maurer with Maurer Architecture in Raleigh. “That is a tax credit, not a rebate or a grant. It is applied to your income taxes, but the net result is you’re spending 60 cents on the dollar to renovate your building, and in a lot of cases, that makes a huge difference in these projects.” One such project Maurer worked on was a former drugstore in downtown Goldsboro that was transformed into a dining room for a restaurant with upstairs apartments. The $125,000 building had been gutted, but the owner invested roughly $325,000 to renovate it. Financing for the project was $2,150 a month, but income from leasing the spaces is $3,520, so the investor nets $1,370 a month while getting $130,000 in tax credits spread over several years.

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