Are you a real estate investor looking for ways to save money on taxes? If so, have you considered utilizing the Commission for Historical and Architectural Preservation (CHAP)? CHAP offers several tax incentives that can help real estate investors save money while preserving historic properties. In this blog post, we will explore three ways to utilize CHAP for real estate investing and saving money on taxes.
1. Take Advantage of the Historic Tax Credit
One of the most significant benefits of utilizing CHAP is the historic tax credit. This credit allows developers to receive a tax credit equal to 20% of their qualified rehabilitation expenses when rehabilitating a historic property. To be eligible for this credit, the property must be listed on the National Register of Historic Places or located in a designated historic district.
This tax credit can be used to offset federal income taxes and can also be sold or transferred to third parties. Additionally, some states offer their own historic tax credits, which can further increase your savings.
2. Apply for Property Tax Credits
In addition to the historic tax credit, CHAP offers property tax credits as well. These credits are available for both owner-occupied and rental properties located within designated historic districts or individual landmarks.
The amount of the credit varies depending on several factors, including the age and condition of the property, as well as its location within a designated district. However, these credits can significantly reduce your annual property tax bill, making it easier to invest in additional properties.
3. Use Low-Interest Loans
Finally, CHAP offers low-interest loans to developers who are rehabilitating historic properties. These loans can be used to cover up to 50% of eligible rehabilitation costs and come with interest rates ranging from 0% – 3%.
These loans are an excellent option for real estate investors who want to preserve historic properties but may not have enough capital upfront. By utilizing these loans, investors can spread out their costs over time while still receiving significant savings through other CHAP programs such as the historic tax credit.
In conclusion, if you’re a real estate investor looking for ways to save money on taxes while preserving historical properties, consider utilizing CHAP programs like the historic tax credit, property tax credits and low-interest loans. By taking advantage of these programs, you’ll not only save money but also contribute towards preserving our nation’s rich history and architecture.
Remember that each state has its own rules regarding CHAP programs so it’s important to check with your local commission before proceeding with any investment plan.