Legislative committee considering expanded housing tax credit
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A proposed bill now before the state legislature is designed to make improvements to the Historic Rehabilitation Tax Credit program and provide new benefits to owners of historic homes.
The legislature’s taxation committee has scheduled a hearing tomorrow on LD 1810 "An Act to Expand the Historic Rehabilitation Tax Credit."
The bill, sponsored by House Majority Leader Maureen Terry, would update reporting requirements, improve the credit for small projects to make it more user-friendly and accessible for income-producing property owners, and expand the program.
“We receive inquiries from historic homeowners across the state seeking technical assistance and financial support for their rehabilitation projects on a near daily basis,” said Tara Kelly, executive director of Maine Preservation, a Yarmouth-based nonprofit. “Having a tax credit that benefits homeowners, like many other states do, will provide much-needed support for ongoing stewardship, weatherization and housing opportunities all over Maine.”
From 2009 to 2019, 106 projects were certified in Maine using the credit for income-producing properties. The approved projects:
- Generated $525 million in construction
- Rehabilitated 3.6 million square feet of commercial and residential space
- Created or preserved 1,911 housing units, of which nearly 1,300 were affordable
- Generated 200 to 700 full-time-equivalent jobs through construction spending annually
- Created nearly 700 new full-time, year-round jobs in local businesses
In 2021, the Office of Program Evaluation and Government Accountability analyzed Maine's Historic Rehabilitation Tax Credit and found the program's structure and administration were sound and efficient and the positive outcomes exceed stated historic preservation goals while promoting affordable housing, job creation and economic growth.
The office also suggested that policymakers consider whether biennial reporting for the credit was sufficient and efficient. It suggested that policymakers work with the program and stakeholders to clarify the small project credit’s purpose so its effectiveness can be measured in the future.
“OPEGA notes that allowing historic homes, barns and other non-income producing buildings to access tax credits for historic rehabilitation could support Maine’s expressed goals around developing ‘quality of place’ and community revitalization,” the report said.
Making credit available for Maine’s stock of historic houses could support the state’s goal to increase affordable housing and decrease pressure on Maine’s housing market, the report continued.
LD 1810 would improve the credit for small projects by increasing the base credit from 25% to 30% and raising the qualified rehabilitation expenditure cap from $250,000 to $1 million. It would also create a 25% tax credit for historic owner-occupied residences and ancillary structures with a minimum homeowner expense of $5,000 and maximum of $250,000.
Energy efficiency and resiliency upgrades would be included in the qualified expenditures.
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