Other Tax Incentives in Iowa
The historic tax credit programs are sometimes combined with other types of tax incentives available in Iowa, further enhancing the financial viability of preservation projects. These combined incentives encourage the adaptive reuse of historic properties, turning them into productive spaces – whether for housing, commercial use, or mixed-use developments – that contribute to the economic, social, and cultural fabric of local communities. Three popular programs that are combined with the historic tax credit programs are the Housing Tax Credit, Iowa Redevelopment Tax Credit (RTC), and the Workforce Housing Tax Credit (WHTC). By leveraging multiple tax credits and financing tools, property owners and developers are encouraged to restore and adaptively reuse historic properties, contributing not only to the preservation of Iowa’s architectural heritage but also to the revitalization of local communities.
The Housing Tax Credit Program in Iowa includes two related programs that incentivize the development and rehabilitation of affordable housing. These programs, administered by the Iowa Finance Authority aim to increase the supply of affordable housing for low- and moderate-income residents, encourage the revitalization of older buildings, and address housing shortages in both urban and rural areas of the state. The programs are designed to stimulate private investment in the housing sector and provide developers with the financial resources to create and rehabilitate housing that meets specific affordability criteria. Additional information on these programs is available online at https://opportunityiowa.gov/housing/rental-programs/programs-developers-communities-and-property-owners/housing-tax-credit-program
The Iowa Redevelopment Tax Credit (RTC) is a state-level incentive program designed to encourage the revitalization of blighted or underutilized properties in Iowa, known as brownfield or grayfield sites. The program aims to attract private investment for the redevelopment and rehabilitation of vacant, abandoned, or underdeveloped properties, with a focus on revitalizing neighborhoods, downtown areas, and key sites that have potential for economic growth. Administered by the Iowa Economic Development Authority (IEDA), the Redevelopment Tax Credit is a valuable tool for developers and property owners looking to redevelop or rehabilitate properties that are typically not yet competitive in the real estate market. Additional information on this program is available online at https://opportunityiowa.gov/community/revitalization/redevelopment-tax-credits
The Workforce Housing Tax Credit (WHTC) program in Iowa is designed to encourage the development and rehabilitation of affordable housing for low- and moderate-income residents. It provides financial incentives to developers and investors to build, renovate, or rehabilitate housing that is affordable to working individuals and families. The program is administered by the Iowa Economic Development Authority (IEDA) and serves as a key tool in addressing the growing demand for workforce housing across the state. Additional information on this program is available online at https://opportunityiowa.gov/housing/rental-programs/programs-developers-communities-and-property-owners/workforce-housing-tax-credit
In addition to these tax credit programs, the Historic Property Tax Exemption Program offers a graduated scale for increases to property taxes related to the rehabilitation of historic buildings. The State Historic Preservation Office administers the County Historic Property Tax Exemption Program in partnership with County Boards of Supervisors. The program offers a local property tax incentive for the sensitive “substantial rehabilitation” of historic buildings. While all counties are required to provide this exemption, not all counties have set priorities for the program. The program provides a combination of four years of full exemption from any increased valuation due to the rehabilitation, followed by four years of property tax increases (25% per year) up to the new valuation. Additional information on this program is available online at https://opportunityiowa.gov/community/historic-preservation/historic-preservation-tax-credits/property-tax-exemptions
