Tax Credits for Historic Building Preservation in Boston

Boston’s historic property owners can leverage valuable tax incentives to offset restoration costs. Federal and Massachusetts historic preservation tax credits offer up to 20% returns on qualified rehabilitation expenses, making it more affordable to preserve and restore historic commercial and residential buildings (when eligible). 

Understanding Historic Preservation Tax Credits

Historic preservation tax credits are government-backed incentives designed to encourage the restoration and reuse of historic buildings. Unlike deductions, tax credits directly reduce your tax liability dollar-for-dollar, which can mean significant savings for property owners. Both the federal government and the Commonwealth of Massachusetts offer tax credit programs specifically for rehabilitating historic structures. These programs recognize that preserving Boston’s rich architectural heritage often comes with higher costs, and they help bridge the financial gap.

For owners of qualifying historic properties, these credits can offset up to 20% of qualified rehabilitation costs, substantially lowering the net cost of a restoration project. In practice, this means that if you spend $500,000 on eligible preservation work, you could receive $100,000 in tax credits; a major incentive to do things “the right way” and maintain the character of the building. Importantly, to claim these credits, the project must adhere to strict preservation standards and approval processes, ensuring that the restoration truly preserves the building’s historic character. In Boston, these tax credits have become a key tool for revitalizing historic homes, brownstones, and commercial buildings while keeping their historic charm intact.

Federal Historic Rehabilitation Tax Credit (20% Credit)

The Federal Historic Rehabilitation Tax Credit (HTC) provides a 20% income tax credit for the rehabilitation of certified historic buildings. This program is administered by the National Park Service in partnership with the IRS and State Historic Preservation Offices. To qualify, the building must be a “certified historic structure,” meaning it is listed (or eligible for listing) on the National Register of Historic Places or located in a registered historic district and certified as historically significant. Here’s how to tell if your Boston building is historic. Additionally, the property must be income-producing - for example, a commercial, industrial, or rental residential building. (Owner-occupied private homes do not qualify for the federal credit). The rehabilitation work itself must meet the Secretary of the Interior’s Standards for Rehabilitation, ensuring any changes respect the building’s historic character.

If your Boston building qualifies, the benefits are substantial. The federal credit is equal to 20% of qualified rehabilitation expenditures, which can include costs like interior and exterior improvements, structural repairs, building systems upgrades, and more (but not acquisitions or enlargements) as defined by the IRS. This credit has been a game-changer nationwide; it has leveraged over $127 billion in private investment to preserve more than 50,000 historic properties across the country since 1976. Projects ranging from the restoration of downtown commercial blocks to the adaptive reuse of old factories have taken advantage of the HTC, breathing new life into historic structures. By reducing project costs, the credit makes it easier for developers and property owners to justify preserving a historic building rather than demolishing or neglecting it.

How to Claim: To use the federal credit, owners must follow a three-part application through the State Historic Preservation Office (the Massachusetts Historical Commission for Boston properties) and the National Park Service. This involves certifying the building’s historic status and getting the restoration plans approved as meeting the required Standards. Once the project is completed and certified, the credit can be claimed on your federal income tax return (spread over five years, per current tax law). Because the process is detailed, property owners often work with preservation consultants or experienced contractors like JMS Masonry to navigate your requirements.

Massachusetts Historic Rehabilitation Tax Credit (20% State Tax Credit)

Massachusetts offers its own Historic Rehabilitation Tax Credit (MHRTC) to encourage preservation at the state level. Under this program, a certified rehabilitation project on an income-producing historic property can receive up to 20% of qualified project costs as a credit against Massachusetts state taxes. As with the federal program, eligibility hinges on the building’s historic status: the property must be listed on or eligible for the National Register of Historic Places (as determined by the Massachusetts Historical Commission). The renovation work must also comply with the Secretary of the Interior’s Standards for Rehabilitation to ensure authenticity. Essentially, Massachusetts wants to make sure state tax dollars support true preservation work that maintains a building’s historic integrity.

One key difference at the state level is that Massachusetts caps the total credits awarded each year, with (as of August 2025) $110 million available annually for the program statewide. Because of this cap, the credits are competitive; owners must apply for the credit and awards are distributed during three application rounds per year (typically January, April, and August). Projects are evaluated on criteria like significance of the property and public benefit to determine who receives credits if applications exceed the cap. The good news is the MHRTC program has been repeatedly extended by the legislature (most recently through 2030), reflecting its popularity and success in spurring preservation projects.

In Boston and throughout Massachusetts, the state credit is often paired with the federal historic tax credit for maximum benefit. If your project qualifies for both, you could potentially reclaim 40% of your rehabilitation costs (20% federal + 20% state); a HUGE incentive to invest in proper restoration. Even if you don’t have enough tax liability to use the full credit, Massachusetts allows unused credits to be carried forward or even transferred/sold to other investors. In practice, this means a developer renovating a historic Boston building can sell their tax credits to raise cash for the project, making the financing easier. The MHRTC has helped transform hundreds of historic structures into vibrant new housing, offices, and community spaces, all while preserving the Commonwealth’s heritage.

How to Claim: Property owners must apply to the Massachusetts Historical Commission (MHC) for the credit. The application involves Part 1 (establishing historic significance of the property), Part 2 (detailing the proposed rehab work for approval), and Part 3 (certification after completion). It’s advisable to plan ahead due to application deadlines and to secure a support letter from Preservation Massachusetts as required. Given the competition and technical requirements, working with experts familiar with the process can greatly improve your chances of success.

Benefits of Historic Tax Credits for Property Owners

Historic preservation tax credits offer a win-win for property owners and the community. Key benefits include:

• Significant Cost Savings: Recovering 20% (or more, with combined credits) of your restoration expenses through tax credits can make a once-cost-prohibitive project financially feasible. This directly reduces out-of-pocket costs for preserving architectural features like original brickwork, masonry, and woodwork.

• Increased Property Value: Properly restored historic buildings often see their property values rise. You’re not only maintaining the structure’s character but also enhancing its structural integrity and usability, which can attract tenants or buyers willing to pay a premium for historic charm.

• Preservation of Boston’s Heritage: By leveraging credits, owners can afford to preserve unique historical details that might otherwise be replaced or lost. This helps maintain the character of historic Boston neighborhoods for future generations, an intangible benefit that also tends to keep communities culturally vibrant and attractive.

• Economic and Community Revitalization: On a larger scale, historic tax credit projects spur economic growth. Massachusetts’ credit program has catalyzed investment, turning vacant or underutilized buildings into active properties that generate jobs and revitalize neighborhoods. When a dilapidated historic building is restored into apartments, offices, or a cultural venue, it brings new life (and tax revenue) to the community.

• Expert Guidance and Compliance: The requirement that work meets preservation standards means owners typically engage skilled restoration professionals. While this isn’t a direct financial benefit, it ensures high-quality outcomes; your building retains its authenticity and durability, and you gain peace of mind that the work is done right. Plus, having expert guidance through the approval process saves time and avoids costly mistakes.

Note: If you own a historic home that you live in (owner-occupied residence), you unfortunately won’t qualify for the federal or state rehabilitation tax credits under current rules. However, you still have options. Some local programs and nonprofits offer grants or low-interest loans for historic home repairs, and you might explore a historic preservation easement for potential tax deductions. Under an easement, you agree to preserve the property’s historic features in perpetuity, and in return you could receive a federal income tax deduction or other benefit. Easements and other incentives come with their own requirements, so consult with a preservation expert or attorney to evaluate the best strategy for your situation.

JMS Masonry & Restoration: Your Boston Historic Preservation Experts

Once you know what you have to do to receive historic tax credits and maintain restoration standards; you need a team of experts to execute. That’s where JMS Masonry & Restoration comes in. With decades of experience working on historic buildings across Boston and Eastern Massachusetts, JMS Masonry understands the nuances of older buildings, from colonial-era brickwork to 19th-century brownstone facades.

Local Expertise: Boston’s historic neighborhoods (Beacon Hill, Back Bay, South End, etc.) often require approvals from bodies like the Boston Landmarks Commission before work can begin. JMS Masonry has extensive experience coordinating with local preservation officials and obtaining necessary permits and Certificates of Appropriateness for exterior work. We work closely with these agencies so that your restoration not only satisfies tax credit requirements but also proceeds smoothly through local oversight. This ensures you avoid common pitfalls and delays, keeping your project on time and on budget.

Quality Restoration Work: From structural repairs to fine detail restoration, our craftsmen use period-appropriate materials and techniques to preserve your building’s original character. Whether it’s repointing historic brick with lime-based mortar, repairing a stone foundation, or restoring an ornate façade, we approach each project with a deep respect for the building’s history. This attention to detail not only maintains the aesthetic authenticity needed for tax credit compliance, but also extends the life of the structure.

Maximizing Your Tax Credit Benefits: As a contractor experienced in tax credit projects, JMS Masonry can help document the work according to the requirements of MHC and NPS. Our goal is to make sure you get the full financial benefit you’re entitled to, by executing the work in a way that meets all criteria. In short, we help you protect your investment - both the cultural value of your historic property and the monetary incentives available.

Schedule a Free Consultation

Preserving a historic building is a rewarding endeavor, and with the right team and incentives, it can also make great financial sense. JMS Masonry & Restoration is proud to be a leading expert in historic preservation in Boston, and we’re here to guide you every step of the way; from understanding tax credit opportunities to executing a flawless restoration. 

Ready to explore the possibilities for your historic property? Contact JMS Masonry today to schedule a free consultation and let us help you restore your piece of Boston’s history, with maximum savings and minimal stress.