In with the Old: Understanding Utah’s Historic Tax Credit Program

If you own a historic home in need of updates, the Utah Historic Tax Credit can provide some financial relief—if you are willing to jump through some hoops.

The History of the State Historic Preservation Office

After decades of rapid growth and the destruction of sites with historical significance, Congress enacted the National Historic Preservation Act in 1966. The act established a national preservation program to encourage both identification and protection of historic resources at the federal, state, and local levels. Today, each state runs its own State Historic Preservation Office (SHPO) to oversee the protection of these community assets.

What is the Utah Historic Tax Credit?

One function of Utah’s SHPO is to support homeowners in maintaining architectural accuracy during renovations. If you qualify, you can receive a 20% non-refundable state income tax credit for the rehabilitation of a historic structure, which applies to owner-occupied residences as well as residential rentals. The keyword is rehabilitation; the goal of the tax credit is to encourage retention of the original structure. The criteria focus on saving as much of the authentic design and materials as possible.

Example: If you pay $22,000 in qualified rehabilitation costs, you can subtract $4,400 directly from what you owe in Utah state income tax.

Do You Qualify for the Credit?

To be eligible for the 20% credit, your project and property must meet the following baseline criteria:

• Project Minimum: Total rehabilitation costs must exceed $10,000.
• Age Limit: The home must be at least 50 years old (currently including homes built in or before 1976).
• Historical Designation: Buildings must be listed on the National Register of Historic Places within three years of completing the project.

Does your neighborhood qualify?

There are 21 historic districts designated on the National Register throughout Salt Lake City. If you live within one of these boundaries, your home likely qualifies automatically. If your home sits outside a designated district, it can still be eligible individually if it meets at least one of these criteria:

• It is associated with events or people significant to our local or national past.
• It embodies distinctive architectural characteristics of a specific period, type, or method of construction.
• It is likely to yield important historical or prehistoric information.

To list a home individually, you must prepare a nomination form and submit it to the Utah SHPO. If approved, they will forward it to the National Park Service for final listing.

The Step-by-Step Application Process

The Utah SHPO strives to empower homeowners to manage their own projects, but they strongly recommend submitting your application before starting any physical work. Beginning renovations without prior SHPO approval puts you at high risk of disqualification.

Amber Anderson, Tax Credit Coordinator for the Utah SHPO, reports that approximately 100 applicants successfully navigate the process in Utah each year. She provides early guidance to homeowners to help them determine if a project is worth the time and investment.

1. Research & Pre-Qualify:
   Review your home’s age, district status, and planned budget to ensure you meet the $10,000 minimum threshold.
2. Apply with the SHPO:
   Submit your application with a detailed rehabilitation plan to the SHPO before any work begins to secure preliminary approval.
3. Execute & Document:
   Complete your renovations, strictly adhering to historic preservation standards, and document the changes.
4. File for Credit:
   Once the work is completed and certified by the office, the SHPO will issue you a TC-40H tax form to claim your 20% credit.

Real Advice from Utah Homeowners

Here is what local homeowners who have gone through the process want you to know:

Scott: “The process is not intuitive; it takes some serious effort on the part of the homeowner. You need good documentation, a well-laid plan, and a clear understanding of how to use the credit. Thankfully, the team at the SHPO is incredibly knowledgeable and willing to help. They are most concerned with the exterior of the home (windows, doors, brickwork) and keeping the original appearance intact. A good rule of thumb: if the original owner would recognize the structure, the work will likely qualify.”

Ashley: “The requirements are stringent. You really have to believe in, and adhere to, the high standards of historic preservation to utilize this program.”

Karly: “It’s an all-or-nothing credit for the entire project. We tried to maintain our home’s exterior true to the original design, but we were ultimately disqualified because we decided to alter the structural layout of the internal staircase. Make sure you know exactly what is allowed inside and out before changing your plans.”

Additional Resources

1. Salt Lake County Assessor: Find out when your home was built, the value history as estimated by the assessor, and other property facts such as lots size, longitude and latitude, etc.
2. Interactive map of Historic Utah Buildings
3. Fact sheet (pdf) about the The Utah Historic Preservation Tax Credit

Niche Homes Realtors are passionate about supporting our clients with finding the homes that suit them best, whether it’s a historic fixer-upper or a new build. Please reach out to us when you’re thinking about your next move.