Ohio Historic Preservation Tax Credit: How It Works and How to Stack It

Ohio's Historic Preservation Tax Credit (HPTC) is one of the most generous state-level historic incentives in the country — a 25% credit against Ohio income tax liability for qualified rehabilitation expenditures on certified historic structures. For a $4 million rehabilitation, that is a $1 million Ohio tax credit on top of the federal 20% credit, before any additional programs are layered in.

The program is administered by the Ohio Department of Development in partnership with the State Historic Preservation Office (SHPO). Unlike many state historic credit programs, Ohio's HPTC is transferable — credits can be sold to third-party investors if the developer cannot use them directly — making it viable for developers without Ohio income tax exposure. The program has funded projects in Cleveland, Cincinnati, Columbus, Toledo, Dayton, and dozens of smaller Ohio cities.

This guide covers eligibility requirements, the competitive application process, scoring criteria, what constitutes a Qualified Rehabilitation Expenditure in Ohio, and how to build the optimal stack combining Ohio's 25% credit with the federal 20% credit, New Markets Tax Credit, and JobsOhio Revitalization grants.

Eligibility: What Qualifies as a Certified Historic Structure in Ohio

To qualify for the Ohio HPTC, a building must be a certified historic structure — meaning it is individually listed on the National Register of Historic Places, or located in a certified historic district and contributing to that district's historic character. Ohio SHPO makes the contributing/non-contributing determination for district buildings. The building must be income-producing: it must be used in a trade or business or held for the production of income. Owner-occupied residential properties do not qualify. The rehabilitation must meet the Secretary of the Interior's Standards for Rehabilitation, the same federal standard used for the federal Historic Tax Credit. Ohio SHPO reviews rehabilitation plans for compliance before construction and certifies completed work after. Projects that alter exterior features, remove historic fabric, or add incompatible additions frequently fail SHPO review — engage an experienced historic preservation architect early. The minimum Qualified Rehabilitation Expenditure threshold in Ohio is $5,000, but competitive applications typically involve projects of $1 million or more.

The Ohio HPTC Application Process: Competitive Rounds and Scoring

Ohio's HPTC is allocated competitively. The Ohio Department of Development announces application rounds — typically two per year — with a fixed pool of credits available each round. Applications are scored, and projects above the competitive threshold receive a credit reservation. Scoring criteria include: development impact (jobs created, private investment leveraged, community revitalization), project feasibility (strength of financing, developer track record), historic significance of the building, project readiness, and geographic diversity. Projects in smaller Ohio communities or underserved markets sometimes receive scoring advantages. The key competitive insight: Ohio's HPTC rounds are oversubscribed — meaning more credits are requested than are available. Scoring close to the threshold does not guarantee an award. Projects that clearly demonstrate economic impact, have a strong financing plan, and are in project-ready condition consistently outperform. Submit with a fully executed construction contract, committed financing, and a completed Part 2 SHPO review whenever possible.

Qualified Rehabilitation Expenditures: What Counts in Ohio

Ohio uses the federal definition of Qualified Rehabilitation Expenditures (QREs) as the basis for calculating the state credit, with minor Ohio-specific modifications. QREs include: exterior rehabilitation work meeting SHPO standards, interior rehabilitation including structural systems, mechanical, electrical, plumbing, and interior finishes meeting the Standards, architectural and engineering fees directly related to the rehabilitation, and certain soft costs. QREs exclude: land acquisition, new additions that are not certified as part of the historic structure, personal property, and work that does not meet the Secretary of the Interior's Standards. The 25% Ohio credit applies to the total certified QREs — so accurate QRE tracking from the start of construction is essential. Many developers hire a cost segregation specialist to document and segregate eligible vs. ineligible costs throughout construction, producing the certified cost statement required for final SHPO certification.

Stacking Ohio HPTC with Federal Credits, NMTC, and JobsOhio

The Ohio HPTC is explicitly designed to stack. The most powerful Ohio combinations: Federal Historic Tax Credit (20%) + Ohio HPTC (25%): Applied to the same QREs on a certified historic structure, these two credits together cover 45% of qualified rehabilitation costs in tax credits — the baseline stack for any qualifying Ohio historic project. New Markets Tax Credit (39%): NMTC can be layered onto an Ohio historic rehabilitation in an eligible census tract. NMTC provides below-market financing on a leveraged loan, effectively generating additional equity from the same development costs. The combined Ohio HTC + Federal HTC + NMTC stack is well-established in Cleveland, Cincinnati, and Columbus. JobsOhio Revitalization Grant: JobsOhio provides direct grants for adaptive reuse and commercial rehabilitation projects that create jobs. A historic mixed-use project with commercial tenants can receive JobsOhio gap funding on top of both historic credits. Ohio Community Reinvestment Area (CRA): Property tax abatement available on the increased assessed value of a rehabilitated historic building — additional cash flow benefit that improves project returns without touching the credit basis.

Transferability: Monetizing Ohio Historic Credits Without Ohio Tax Liability

Ohio's HPTC is transferable, which is a critical feature for developers and investors without Ohio income tax exposure. Credits can be sold to Ohio taxpayers — typically financial institutions or Ohio-based corporations — through a direct transfer or through a tax credit broker. Transfer pricing varies by vintage and credit quality but typically ranges from 85 to 92 cents per dollar of credit. A $1 million Ohio credit transferred at 88 cents generates $880,000 in cash equity for the project. This transfer mechanism makes the Ohio HPTC accessible to out-of-state developers, LLC structures without Ohio pass-through income, and projects that need cash equity rather than tax offset. Work with an Ohio tax credit attorney and a credit broker early in project structuring to determine whether direct use or transfer better serves your capital stack.