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Lathrup Village Historical Society Serving Lathrup Village Since 1992 |
Tax Credit |
Contact us:Bo Tomkie, Historian Webmaster Lathrup Village Historical Society
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If your home is in the Lathrup Village National Historic District and is at least 50 years old, expenses you incur for renovations may qualify for the Michigan Historic Preservation Tax Credit. This is a credit (not a deduction) for 25% of the total cost of projects, worth at least 10% of your SEV. Well Worth the EffortBy Margaret Baxter Note: This is an abridged version of an article that was published in the April 2003 issue of the “Lathrup Village Historical Society Newsletter.” When we moved into our historic Lathrup home, we knew there were many large projects we would have to undertake during our stewardship of the home. One of the more daunting was fixing or replacing the 70-year-old slate roof. Initially, we thought we might be able to repair the weaker spots, but quickly realized the entire roof needed replacing. We called a few contractors, most of whom did not bother to come out. One who did quote the work—to the tune of $100,000, including copper downspouts—was a bit beyond our reach. We researched alternatives—slate look-alikes, asphalt, and other options. Purists that we are, we decided that slate was the only way to go. Because of the cost, we were determined to do much of the work ourselves. Now, fast-forward: Two truckloads of Maine slate, one home equity loan, one ladder accident, hundreds of buckets loads of rotten slate, three dumpsters, one hornet’s nest, and two years later, our roof was complete. During this time, I became aware of the Michigan Historic Preservation Tax Credits available to people whose property falls within a historic district or is a designated historical site. The credit is fairly simple: It is a credit (not a deduction) for 25% of the total cost of a project or projects, worth at least 10% of your SEV. Multiple projects can be grouped to meet the minimum cost requirements. Projects must be in keeping with Historic Preservation guidelines. The guidelines limit you to the use of original materials, in keeping with the historic integrity of the property. However, they allow for such modernizations as blown-in insulation, renovation of a kitchen or bathroom, even an addition. They prevent a homeowner, however, from claiming a credit when, for example, vinyl windows are used to replace steel casement windows. Applying for the credit, involves three-steps: n Certify with the State that your home is in the Historic District. n Describe the work you intend to do. Submit before photos, photos of the property from various elevations, and interior shots. n Complete work and submit paperwork along with after shots of the finished project(s). You may do two or all three steps at one time. The forms have line-by-line instructions to walk you through this process. We were able to take the cost of roofing materials, downspouts, gutters, and money we paid a contractor for his assistance; dumpsters; and other miscellaneous expenditures for the roof. We now had a State of Michigan tax credit for 25% of the total. It brought the cost of the roof in line with what we might have paid to have an asphalt roof put on in place of the slate, and allowed us to maintain the historic integrity of the home. It was not a small undertaking to submit the required paperwork, maps, elevations, property plans and photographs—it took the better part of a weekend and a few hours at Kinko’s to put all of the information into a format for submission. It then took about six weeks to hear back that we had been approved. The State Historic Preservation Office has a website from which you can download the forms needed for the credit and find further detail on how to qualify. The staff is extremely helpful and is an excellent resource. Frequently Asked QuestionsWhat is the Historic Preservation Tax Credit? The tax credit provides incentives for homeowners, commercial property owners, and businesses to rehabilitate historic resources located in the State of Michigan. I did work on my home last year, and didn’t know about the credit. Can I still apply? Yes, if you can supply the necessary documentation on the project including before-and-after photos. You still need to meet all of the other qualifications for the credit. How do I know if my home is in the Historic District? The City of Lathrup Village offices can provide you with a map of the Historic District. Your home must also be over 50 years old. What if my tax credit exceeds my yearly tax liability? You can then claim the credit over a series of years. The credit must be claimed in the year that the certification is given. How can I be assured that my project will qualify and be approved? It is best to use the three-step approach recommended by the State Historic Preservation Office: certification of the resource, approval of the planned work, and final approval once completed. See the website for complete information. I plan to remodel my kitchen, which will be a large, costly project. I also am planning on other smaller renovations. Will they all qualify? You can submit your plans for multiple projects. They each must qualify for the credit, and the total must be equal to at least 10% of your SEV. We plan to install a historically correct garden and landscape design in keeping with the Art Deco look of our house. Can we claim such a project? Historic landscaping may also qualify for the credit. I need to do major infrastructure work on my home – it is not historic in nature but will make the home more livable. For example, we are installing central air. Can this qualify? Yes, often these types of updates do qualify. I need to update our windows. I have cold, leaky metal casement windows, and would prefer another style, either in vinyl or wood. Can I do that and claim it? It is not likely that this would meet the historic preservation guidelines. We have done much of the work on our project ourselves. Can we claim labor for all of our work? No, you can only claim actual expenditures. The original cedar shake roof on our home was replaced years ago with asphalt singles. Do I have to go back to the cedar shake to make our re-roofing project qualify? Not necessarily. Current homeowners are not penalized for changes that previous owners may have made. Note: For the final word, please refer to the State Historic Preservation Office website.
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