What are the incentives?
The Renaissance Zone Program includes two (2) primary incentives, which include the possibility of property tax and income tax exemptions for qualified projects as well as opportunities to pursue historic preservation and renovation tax credits.
As a general overview:
New Construction, Rehab Projects, and Residential Purchases
- Five (5) year, 100% property tax exemption on the value of the building (excludes land)
- For Business or Investment Properties – Five (5) year, 100% exemption on any tax on income derived from the business or investment location (up to $500,000 per year)
- For Residential Purchase – Five (5) year, 100% exemption on up to $10,000 of personal income tax liability ($50,000 total)
Tenant Leases (project must be within a building that has been approved as a RZ project) – Five (5) year, 100% exemption on any tax on income derived from the business location (up to $500,000 per year)
Historic Preservation and Renovation Tax Credits
- North Dakota Historic Property Preservation Tax Credit – a credit against state tax liability of 25% of the amount invested up to $250,000. For additional information, visit http://www.history.nd.gov/hp/ and http://history.nd.gov/hp/taxapplyrenaissance.html
- Federal Historic Rehabilitation Tax Credit – federal income tax credit of 20% of the amount invested for certified rehabilitation and certified historic structures. For additional information, visit http://nps.gov/tps/tax-incentices.htm
Renaissance Zone Funds
As established in state law (N.D.C.C. 40-63-07) a Renaissance Zone Fund (RZF) organization is an entity established by the local zone authority for the purpose of raising funds to finance zone projects. For investors, the amount of tax credit (state tax liability) is equal to 50% of the amount invested during the taxable year. A RZF may invest in any residential, commercial or infrastructure projects in the zone or in any designated Renaissance Zone city.