By Liam Conrad | Reinhart Attorney, 414.298.8069, lconrad@reinhartlaw.com
Liam Conrad
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Since 1989, the Wisconsin State Historic Tax Credit Program has provided significant incentives to redevelop historic properties in the state. This spring, Gov. Evers signed 2025 Wisconsin Act 238 into law, significantly changing the program to make projects more accessible.
Program overview
A tax credit is a dollar-for-dollar tax reduction, differing from a deduction, which lowers taxable income. A credit is more valuable than a deduction, as a deduction is a reduction in income subject to taxation, not a reduction in actual tax. Under the Wisconsin State Historic Tax Credit Program, applicants can receive a tax credit against state income tax equal to 20% of qualified rehabilitation expenditures. Before the changes, eligibility hinged on projects being on or qualified for the National Register of Historic Places, be income-producing, and have minimum project expenditure of the greater of (a) $50,000 and (b) the adjusted basis in the project. Further, there was a $3.5 million maximum credit for the life of any particular project.
A look at the changes
2025 Wisconsin Act 238 made significant changes to the Wisconsin State Historic Tax Credit Program. First, it amended the minimum expenditure to delete the adjusted basis test. Now, projects can qualify for the credit with only a minimum of $50,000 expended; there is no need for the adjusted basis test. Second, while the Act retained the $3.5 million cap on credits per project, it allowed projects to reapply for subsequent credits after 15 years.
Prior to the new Act, many smaller projects could not receive state credits because the minimum expenditure was too high due to the adjusted basis test. Now, the minimum expenditure is only $50,000; there is no adjusted basis test. This makes smaller projects eligible, assuming rehabilitation spending reaches at least $50,000. The loosening of requirements will provide much needed financing to smaller projects, particularly projects in rural areas.
Additionally, projects that had already received awards were ineligible for later awards. As a result, historic projects that needed subsequent repairs were unable to use credits to finance them. Now, projects can receive subsequent awards after 15 years. This incentivizes long-term investment in historic projects by providing a source of financing 15 years after the initial investment.
If you have any questions about state or federal historic tax credit transactions, please contact Liam Conrad or another member of our Real Estate Tax Credits Team.
