TRENTON – The Senate Budget and Appropriations Committee unanimously approved legislation today sponsored by Senator Barbara Buono that would encourage the rehabilitation of historic properties in the State by offering tax credits for a portion of the cost of the rehabilitation.
“There are many historic buildings in New Jersey that have seen far better days,” said Senator Buono, D-Middlesex and Chair of the Committee. “These buildings form the core of our older neighborhoods and through their rehabilitation, we can breathe new life into these communities and combat sprawl.”
Senator Buono’s bill, S-2030, would establish State tax credits for the cost of rehabilitating historic properties in the State. The bill would authorize for individual homeowners a tax credit of 25% of the taxpayer’s outlay for rehabilitating a historic property, capped at $25,000. In addition, businesses would receive a 25% tax credit that would not be capped. The tax credit would be against the individual’s gross income tax liability; the businesses’ corporate business tax and insurance premiums tax liabilities.
If the taxpayer’s liability is insufficient to take full advantage of the credit, the bill provides that the taxpayer may sell the credit by means of a tax credit transfer certificate program.
Senator Buono noted that this measure also helps to combat sprawl and preserve open space.
“Other states like Maryland have shown these tax credits can be a powerful stimulus to the economy. They create revitalization opportunities in blighted areas that increase property values, reduce sprawl and help preserve open space. Additionally, we can foster heritage tourism in areas of the State that would otherwise be quickly dismissed by visitors,” explained Senator Buono.
To qualify for the tax credit provided for in the bill, the property to be rehabilitated must be individually listed or located in a district listed on the National or New Jersey Register of Historic Places, and if located in a district, certified as contributing to the district’s historic significance and identified for protection as a significant resource in accordance with criteria established by the appropriate municipality and approved by the State Historic Preservation Officer.
“Our historical sites are not just a source of pride for New Jersey, but also a valuable and largely untapped economic resource. We need to more to make sure that they are not just part of our past, but an integral part of our future,” added Senator Buono.
In addition, the homeowner seeking the tax credit must agree to spend no more than 60% of the cost of rehabilitation on the interior and own and occupy the property as their principal residence for twelve consecutive months following the completion of the rehabilitation.
The bill would limit the cumulative amount of the tax credits to $15 million in fiscal year 2008, $25 million in fiscal year 2009, $40 million in fiscal year 2010, and $50 million in fiscal year 2011 and thereafter. In addition, the bill would require that in any given year, 33 percent of the total approved credits would be to homeowners.