Detroit Foreclosure Investors

Detroit property that meet a certain criteria in age and/or importance are eligible for tax credits that make investing in these properties even easier.

At the federal level, you can apply for a Federal Rehabilitation Tax Credit of up to 20 per cent of a restoration. If your property has not been certified, you can apply to have it certified or take advantage of the 10 percent credit for non-historic, non-residential buildings put in service before 1936. These credits have been used to revitalize buildings that were seriously dilapidated. They can be applied to all kinds of work on the building including, “architectural and engineering fees, site survey fees, legal expenses, development fees, and other construction-related costs”.

At the state level, tax credits are offered through the Michigan State Historic Tax Credit. The State-only tax incentives are targeted at those resources that by virtue of their designation, end use, or the limited nature of the rehabilitation investment do not qualify for the federal credits. To be eligible for State-only credits a project must meet one of the following criteria:

• The resource is located in a locally designated historic district.
• The resource is listed individually, or is part of a historic district listed in the State Register of Historic Sites or the National Register of Historic Places and is in a unit of government with a population of less than 5,000 people.
• The resource is listed individually, or is part of a historic district listed in the State Register of Historic Sites or the National Register of Historic Places and is located in a chartered summer resort and assembly association.
• The resource is listed individually, or is part of a historic district listed in the State Register of Historic Sites or the National Register of Historic Places and is subject to a historic preservation easement.

State-only credits are non-competitive and non-caped and are equal to 25% of the projects qualified expenditures.

Some historic districts in the city of Detroit that are viable or are undergoing a renaissance include: Boston-Edison, Virginia Park, Brush St. (Wayne State University district), Indian Village, and Palmer Park.