New Markets Tax Credits

Historic Tax Credits (HTC) in Commercial Real Estate

Historic Tax Credits (HTC) in Commercial Real Estate

The Historic Tax Credit, or HTC program, is a 20% federal tax credit designed to encourage investors to fund the substantial rehabilitation of historic structures. Since 1976, Historic Tax Credits have bee responsible for creating $144.6 billion in private investment in historic building rehabilitation while preserving more than 43,000 historic structures across the country. With the credit, an investor can take 20% of the Qualified Rehabilitation Expenditures (QREs) of the project as a deduction from their federal income taxes.

New Markets Tax Credits (NMTC) in Commercial Real Estate

New Markets Tax Credits (NMTC) in Commercial Real Estate

The New Markets Tax Credit (NMTC) is a federal tax incentive program designed to encourage investment in low-income communities. Since congress started allocating credits in 2003, the program has issued approximately $25 billion in tax credits. Specialized investment vehicles called community development entities (CDEs) compete for NMTCs, which are allocated by the U.S. Department of the Treasury. Once a CDE has been allocated NMTCs, they can award investors the tax credits. In order to qualify for NMTCs, a CDE needs to invest or provide loans to a business located in one of approximately 31,000 qualified low-income census tracts.