What is a tax credit?
A tax credit is a percentage of money spent to improve your home. Tax credits are better than tax deductibles because they work on a dollar-for-dollar basis. If you owe the government $6,000 in taxes and you have a tax credit of $4,000, you would end up needing to pay $2,000.
Wisconsin Historic Home Tax Credit
In Wisconsin, the Historic Home tax credit returns 25% of the total restoration cost. To be eligible to receive the tax credit, the project needs to be a minimum of $10,000 over the course of 2 years. There is also a maximum of $40,000. You can submit multiple applications, so if there is work that reaches $80,000, they can be split over two applications, so you receive a better tax credit amount altogether.
Steps to Apply for Your Old Home’s Tax Credit
One notable step in the tax credit application process is to make sure all work has been approved before any work has commenced.
The next step is to see if your home qualifies for tax credits in Wisconsin. You are able to look up your home on the Wisconsin Historical Society website. If you are able to find your home, it is already listed as historic and you can move forward with the tax credit process. If your home isn’t listed, you can still apply for the tax credit but will require research into whether or not your home is historic. For the application process, you will need to know the date the home was built, the style and current condition, if there have been any additions, and why the home is significant.
Other steps will include getting current photographs of your home, estimates for each project, as well as an estimate for the start and completion dates. While you don’t need to get a formal bid for your historic home to determine costs, it could be a useful tool when applying for a tax credit.
What’s the oldest neighborhood organization in Milwaukee?
While a number of neighborhoods have historic houses in Milwaukee, the “Historic Water Tower Neighborhood” is the largest and oldest neighborhood organization. Founded in 1973 as the “Water Tower Landmark Trust” this group sought to preserve the housing stock on Milwaukee’s East Side. According to the HWTN Remembering Our Own Past Presentation, the group that started the trust “became one of the most unusual and most effective neighborhood organizations in the city. Its leaders worked for a new zoning ordinance and more rigorous building code enforcement. They negotiated with local institutions and developers. They spearheaded efforts to secure landmark status for the neighborhood.” Now, the area has over 500 homes that were built more than 100 years ago.
Are you interested in applying for Wisconsin’s Historic Home tax credit?
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Sources:
https://hwtn.org/neighborhood-history/
https://city.milwaukee.gov/cityclerk/hpc/HistoricPropertiesDistricts
https://www.revenue.wi.gov/Pages/FAQS/pcs-historic.aspx
https://www.wisconsinhistory.org/Records/Article/CS3942
https://www.wisconsinhistory.org/Records/Article/CS15309
https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/what-are-tax-credits/L1C2IkvRt
https://www.businessinsider.com/personal-finance/what-is-a-tax-credit
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