Historic Tax Credit Growth and Opportunity Act of 2025

This legislation updates the historic rehabilitation tax credit to make it easier to use. It lets you claim the full 20% credit in the year the building is placed in service, for buildings placed in service after December 31, 2023. It also boosts help for smaller and rural projects by allowing a 30% credit on qualifying small projects, up to $3.75 million in rehab costs (up to $5 million in rural areas).

Owners of qualifying small projects may transfer the credit to another taxpayer using a simple certificate; the buyer can’t deduct what they paid, and the seller doesn’t count the amount received as income. The legislation also expands which buildings can qualify, stops the rule that would lower a building’s value for tax purposes because of the credit, and adjusts rules so certain projects with tax‑exempt users aren’t automatically disqualified due to lease terms.

• Who is affected: People and developers fixing up historic buildings, especially small projects and rural communities.
• What changes:
  • Full 20% credit allowed in the year the building is placed in service.
  • 30% credit option for qualifying small projects, with dollar caps and the ability to transfer the credit.
  • Broader building eligibility, no reduction to a building’s tax value because of the credit, and updated rules for tax‑exempt use projects.
• When: The 20% timing change applies to property placed in service after December 31, 2023. Most other changes apply to property placed in service after the date this becomes law.