Bill Creates Tax Credit for Rehabilitation of Blighted Buildings & Sites
Frankfort, KY—House Democratic Caucus Chairman, Representative Dennis Keene has filed House Bill 518 legislation to create a state tax credit for the rehabilitation of abandoned buildings and blighted properties. HB 518 is a first step in what Keene intends as a multi-faceted plan to spur economic development and job growth, particularly in urban areas of Kentucky.
“Despite a strong economic recovery, we still have pockets of urban poverty and lack of opportunity that need to be addressed,” said Representative Keene. “Some of the conditions that impede economic development in Kentucky’s cities relate to blighted, abandoned properties and brownfields needing environmental remediation. HB 518 is designed as a first step toward solving those problems.”
The bill would create a tax credit equal to the costs of rehabilitating abandoned buildings, with minimum qualifying costs of $100,000 or $200,000, depending upon the population of the county in which the building site is located. Building sites located in urban county governments, in cities with a population of 100,000 or more, or in unincorporated areas of a county with a population of 100,000 or more would require qualifying costs of $200,000; all other building sites would require costs of $100,000. The tax credit is capped at $500,000, earned in the year the site is completed and taken in equal installments over the next five taxable years. It is also transferable if the party rehabilitating the site sells the property.
HB 518 includes an additional feature allowing a taxpayer qualifying for the rehabilitation tax credit to potentially receive advance disbursement of incentives authorized under the Kentucky Business Incentives program in KRS 154.32.
“Incentivizing development in our urban cores would help us with more job opportunities,” said Keene. “Urban revitalization can start with cleaning up these blighted properties to give more people a reason to grow businesses and hopefully spur residential development as well. This bill at least gets us pointed in the right direction with another tool in the toolbox.”