Historic-home owners could claim tax credits for approved repairs

New Jersey would offer an approved income tax credit worth 25% of eligible historic-home repair costs. Owners must meet the program’s historic-home and repair requirements. The state must approve the application. Owners would receive a refund if their credit exceeds their income tax bill. Credits would be capped at $25,000 per property within any ten-year period and $15 million statewide in total. The act would take effect upon enactment and apply to tax years beginning on or after the following January 1. Owners would claim credits for the year the state issues certification.

Homes would need recognized historic status and use as a one- or two-family permanent residence to qualify. New Jersey homes could qualify through national or state historic registers, Pinelands historic designations, or approved local historic protections. Homes in historic districts must be certified as contributing to the district’s historic importance. Local historic protections must use criteria approved by the State Historic Preservation Officer. Owners called to active military duty could keep their permanent homes eligible while away if they retain ownership.

Owners would need to meet minimum repair spending, residence, and preservation requirements to claim the credit. Co-owners would each claim costs they paid, while their combined costs must meet the spending threshold and interior-work limit. Total repairs must cost at least half the building’s adjusted assessed value for property taxes, using the last tax bill before work starts. At least one owner must occupy the home as a permanent residence for 12 consecutive months after repairs finish. Interior work may supply no more than 60% of costs counted for the credit. The state must certify that repairs substantially meet federal historic-preservation standards.

Owners would have to repay disallowed credits if later architectural changes make their homes fail the program’s preservation rules. This rule would cover owners who received the credit. Repayment would apply to the portion of the credit the state disallows. The repayment share would fall from 100% in the first full year to 20% between the fourth and fifth full years. The repayment rule would apply before the end of five full years after repairs finish.