On September 4, 2024, New Jersey Governor Phil Murphy signed a new law that makes it easier and more rewarding to invest in historic properties and redevelop contaminated sites. This law increases the tax credits available for certain projects and loosens some of the requirements, aiming to boost economic development and environmental cleanup efforts across the state.
Bigger Tax Credits for Historic Property Reinvestment
The Historic Property Reinvestment Program now offers larger tax credits for renovating qualified properties. For properties in qualified incentive tracts or government-restricted municipalities, the tax credit covers up to 60% of rehabilitation costs (previously 45%), with a new maximum of $12 million (up from $8 million). For other properties, the credit increases to 50% of rehabilitation costs (previously 40%), with a cap of $8 million (up from $4 million).
The law also simplifies eligibility for some projects. Businesses only need to prove they have a financial gap for projects outside of government-restricted municipalities, as long as the total rehab cost is at least $5 million.
Additionally, the New Jersey Economic Development Authority (NJEDA) can now dedicate up to 50% of the yearly tax credits to facade rehabilitation projects. These projects focus on repairing the exterior of buildings, with a tax credit covering 50% of the costs, up to $4 million. Eligible work includes fixing walls, windows, doors, and other external features.
More Support for Brownfield Redevelopment
The Brownfield Redevelopment Program also gets a boost. For projects in qualified incentive tracts or government-restricted municipalities, the tax credit now covers 80% of the cost of cleaning up contaminated land (previously 60%), with a new cap of $12 million (up from $8 million). This change helps reduce the cost burden for developers working on brownfield sites.
If a project involves installing a solar panel array on a closed landfill, the tax credit can now cover 100% of the cleanup costs, with a cap of $12 million if in a qualified area, or $8 million elsewhere.
These changes to the Historic Property and Brownfield Programs show New Jersey’s commitment to improving its communities by encouraging investment in older buildings and contaminated sites. The larger tax credits and relaxed rules make these projects more financially attractive, helping developers breathe new life into properties and clean up the environment.
If you’re planning a redevelopment or rehabilitation project, it’s worth exploring how these enhanced tax credits could benefit your efforts. Consult a professional to see how your project could qualify.
For additional details and tax advice, please contact Martin D. Hauptman at (973) 243-7912 or via email at mhauptman@mblawfirm.com