If you’re considering purchasing or restoring a historic home in Minnesota, you might be wondering: Are there tax credits or financial incentives available for historic home restoration? The answer is a resounding yes — and knowing how to leverage these programs could save you thousands.
What Is a Historic Home in Minnesota?
A historic home is typically a property listed on the National Register of Historic Places or designated as part of a local historic district. Minnesota is home to thousands of these properties, especially in cities like St. Paul, Minneapolis, Stillwater, and Duluth, where the architectural history is rich and well-preserved.
What Tax Credits Are Available for Historic Home Restoration?
1. Minnesota Historic Structure Rehabilitation Tax Credit
One of the most powerful tools for real estate investors and homeowners is the Minnesota Historic Structure Rehabilitation Tax Credit. This incentive offers:
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A 20% federal income tax credit
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An additional 20% state income tax credit
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Available for income-producing properties, such as rental homes or commercial spaces
While this doesn’t currently apply to owner-occupied homes, many Minnesotans turn historic properties into short-term rentals, bed-and-breakfasts, or investment properties to qualify.
2. Local Property Tax Deferrals and Abatements
Some cities and counties in Minnesota offer property tax abatements or freezes for homes undergoing qualified historic restoration. Check with your local preservation commission or county assessor to learn about programs in your area.
3. Grants and Low-Interest Loans
Depending on where your historic home is located, you may also qualify for grants, low-interest loans, or matching funds through local heritage preservation commissions, the Minnesota Historical Society, or regional planning agencies.
Why Restore a Historic Home?
In addition to financial incentives, restoring a historic home adds long-term value, preserves architectural heritage, and often qualifies the home for higher resale value in Minnesota’s competitive real estate market. These homes are especially desirable in cities like Rochester, Northfield, and Red Wing, where charm and craftsmanship are major selling points.
Key Real Estate Tips for Buyers Interested in Historic Homes
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Work with a licensed Minnesota real estate agent who understands historic properties
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Consult a preservation architect or contractor experienced in restoration
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Verify your property’s historic status before starting any renovations
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Understand the Secretary of the Interior’s Standards for Rehabilitation, which dictate how restorations must be completed to qualify for tax credits
In Summary
Historic home tax credits and financial incentives in Minnesota offer a fantastic opportunity for homeowners and investors alike. With potential savings of up to 40% through federal and state tax credits, plus possible local grants and property tax relief, restoring a historic home is not only a passion project but a smart real estate investment.
Thinking about restoring a historic home in Minnesota? Let’s talk strategy and find the right opportunity for you. Reach out today — your dream property might already be on the market.
— Jordan Eatherton, Apex Realty Team