Protecting Historic Properties In Perpetuity

The Federal Historic Preservation Tax Incentive Program allows an owner of an eligible historic property to donate a historic preservation easement on the exterior of the property to a qualified charitable or governmental organization and, in connection with this donation, be eligible to claim a tax deduction in the amount of the easement value as determined by a qualified, independent appraiser.

To be eligible, the property must be either located in a registered historic district or individually listed on the National Register. A registered historic district is one that is either listed on the National Register of Historic Places or a state/local district that has been certified by the National Park Service. For properties in a registered historic district, the property must be certified as a contributing property by the National Park Service. There are no restrictions as to the use of the property (e.g., residence, multi-unit residence, commercial, institution) or its fair market value (the property may be valued from the tens of thousands to the tens of millions of dollars).

A historic preservation easement is a legal agreement made between a property owner and a qualified charitable or governmental organization to protect in perpetuity a building’s historic exterior. By donating an easement, the owner promises not to change the outside appearance of the property without permission from the charitable or governmental organization. This commitment becomes part of the property deed and extends to future owners as well.

Internal Revenue Tax Code Section 170(h) and the related Treasury Regulations (available on this website in the Tax Law Library) outline the specific requirements for a donor to be eligible for a tax deduction in connection with a historic preservation easement donation. Many state and municipal tax codes also recognize an easement donation as a tax deductible charitable contribution. Any property owner should consult with his or her legal and/or tax advisor to obtain an understanding of the requirements of this program prior to making a historic preservation easement donation.

Program Overview
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