Economic developers seeking new life for abandoned and/or historic buildings in their communities recently received a boost.
Gov. Nikki Haley recently signed into law some amendments (H. 3725) to existing tax credits for abandoned and historic buildings. The changes further encourage rehabilitation of these types of buildings, which can be found throughout South Carolina. Here are the key changes:
- For historic structures, a taxpayer may now take a 25 percent tax credit in lieu of the previous 10 percent tax credit, not to exceed $1 million dollars per building.
- The credit for historic structures must be taken in equal installments over a three-year period beginning with the year in which the property is placed in service.
- The abandoned building rehabilitation tax credit can now be applied to insurance premium taxes.
- The abandoned building credit must be taken in equal installments over a three-year period beginning with the tax year in which the applicable phase or portion of the building site is placed in service. Unused credit may be carried forward for the succeeding five years.
- The abandoned building credit may not exceed $500,000 for any taxpayer in a tax year for each abandoned building site.
The South Carolina Abandoned Buildings Revitalization Act was originally passed in 2013 to offer tax credits to those who redevelop buildings that have laid dormant for five years or more. This includes state-owned buildings.
As we have noted before, abandoned buildings are sometimes left off lists of “available” properties due to the redevelopment challenges they pose. However, some economic development prospects might consider rehabilitating a historic building if the process could be made cost effective.