How to Use NM’s 50% Historic Tax Credit in Eastside

Thinking about repairing adobe walls, restoring vigas, or updating systems in your Historic Eastside home, but worried about cost? New Mexico’s 50 percent Historic Preservation Tax Credit can cover a big chunk of eligible work if you plan it right. You want to preserve your home’s character and protect your budget at the same time. In this guide, you’ll learn who qualifies, what work counts, how to apply, and the local steps unique to Santa Fe’s Eastside so you can move forward with confidence. Let’s dive in.

What the 50 percent credit covers

New Mexico offers a state income tax credit equal to 50 percent of eligible rehabilitation costs on properties listed on the State Register of Cultural Properties or contributing to a listed historic district. Within a 24-month approved project window, eligible costs are capped at $50,000 per approval period, which means a maximum $25,000 credit. If your property is in a State-certified Arts and Cultural District, the eligible cost cap doubles to $100,000 and the maximum credit is $50,000. The credit is non-transferable, applies in the year the project is completed, and any unused amount can be carried forward for four years. Learn the program basics on the New Mexico Historic Preservation Division’s tax credit page, including forms and deadlines at the Historic Preservation Division tax credits page.

Are you eligible in Historic Eastside?

Many homes in Santa Fe’s downtown and eastside neighborhoods contribute to the Santa Fe Historic District and related listed districts like Barrio de Analco, Don Gaspar, and Camino del Monte Sol. To qualify for the state credit, your property must be individually listed on the State Register or be a contributing resource within a listed district. Confirm status directly with HPD staff and review current requirements via the Historic Preservation Division tax credits page.

What work usually qualifies

Eligible work focuses on preservation and rehabilitation that follows the Secretary of the Interior’s Standards and HPD guidelines. Examples that are often eligible include structural stabilization, foundation repairs, roof repair or in-kind replacement, repair of historic windows and trim, and major systems like HVAC, electrical, and plumbing when needed to preserve the building. Routine maintenance, cosmetic remodels, furnishings, landscaping, new additions, and demolition typically do not qualify. HPD and the Cultural Properties Review Committee determine final eligibility of each line item. See the HPD overview and guidance at the Historic Preservation Division tax credits page.

How to apply: step-by-step

• Contact HPD early to discuss your project and timeline. You must obtain Part 1 approval before you start any work you hope to claim.
• Submit Part 1 for CPRC review with a clear scope of work, photos, and descriptions. Approvals generally last 24 months unless amended.
• Coordinate local approvals and permits, then complete the work as approved. Keep detailed before-and-after photos, contractor invoices, paid receipts, and drawings that separate eligible tasks.
• Submit Part 2 after completion documenting actual work and costs. The CPRC will certify the eligible expenses and confirm your credit amount.
• Claim the credit on your New Mexico income tax return in the year the project is certified as complete.

You can find the state’s statutory framework for the credit and caps through the Legislature at HB0255 and related rules in the New Mexico Administrative Code at 4.10.18 NMAC.

Filing and tax forms

Individuals typically claim the Preservation of Cultural Properties credit using the appropriate PIT schedule, and corporations use the CIT schedule. The New Mexico Taxation and Revenue Department lists current conservation and preservation tax credit forms and instructions on its Conservation and Preservation Tax Credits page. If you cannot use the full amount the first year, you may carry forward the unused credit for up to four additional years.

Federal vs. state credits

The New Mexico program is separate from the federal 20 percent Historic Rehabilitation Tax Credit, which applies only to income-producing properties. If your Eastside property includes rental or commercial space, you might pursue both programs in parallel, but you must apply to each program separately and allocate expenses correctly. Review the federal program details at the National Park Service’s application process page and consult a tax professional to plan the best approach.

Santa Fe permitting and local review

In Santa Fe’s historic districts, exterior work that changes appearance usually requires a local Certificate of Appropriateness from the City of Santa Fe before permits are issued. This local process is separate from the state HPD/CPRC approvals, and you often need both before work starts. For background on local preservation planning and review, see the city’s historic preservation plan overview referenced here: City of Santa Fe historic preservation plan. Considering specialized materials like adobe, earthen plaster, vigas, and canales, it is wise to use contractors with local preservation experience. The Historic Santa Fe Foundation can be a helpful resource for education and community context at the Historic Santa Fe Foundation page.

Example: how the math works

• Scenario A: A typical Eastside home not in an Arts and Cultural District completes $50,000 in eligible expenses within the 24-month window. The state credit equals 50 percent, so the owner may claim $25,000 against New Mexico income tax liability, with up to four years to carry forward any unused amount.
• Scenario B: The same project within a State-certified Arts and Cultural District could have up to $100,000 in eligible expenses. The state credit would be $50,000 maximum for that approval period.

HPD determines eligibility and the final credit amount based on your documented scope and costs.

Quick checklist for Historic Eastside homeowners

• Verify your property’s State Register or contributing status with HPD and check if it lies in an Arts and Cultural District.
• Speak with HPD staff and submit Part 1 for CPRC approval before any work you want to claim.
• Start City of Santa Fe historic review and permit applications in parallel with state approvals to keep the schedule on track.
• Hire contractors experienced with Secretary’s Standards and traditional materials and keep detailed documentation of eligible line items.
• After completion, submit Part 2 for certification, then file the credit using the current state tax forms.

Pitfalls to avoid

• Starting work before Part 1 approval can make those costs ineligible for the credit.
• Mixing eligible and ineligible tasks on invoices makes it harder to claim the full amount. Itemize clearly.
• Assuming state certification replaces city approvals can lead to enforcement issues. Obtain both.
• Treating the credit as cash back can cause confusion. It reduces state income tax owed and any remainder carries forward.

Planning to buy or sell in the Eastside

If you are buying, line up HPD pre-approval and City review early so your contractor can proceed without delay after closing. If you are selling, recently certified work and clear documentation can signal quality stewardship to buyers. Our team’s renovation know-how and local process insight help you sequence approvals, select the right scope, and keep your project compliant while protecting the character that makes Eastside homes special. When you are ready, connect with the Ralph Alan Real Estate Group to plan your next step.

FAQs

What is New Mexico’s 50 percent Historic Tax Credit for a Santa Fe Eastside home?

• It is a state income tax credit equal to 50 percent of eligible rehabilitation costs on properties listed on the State Register or contributing to a listed district, with a $25,000 maximum credit per 24-month approval period or $50,000 in State-certified Arts and Cultural Districts, claimed in the year of completion and carried forward up to four years, as outlined by the Historic Preservation Division.

How do I confirm my Historic Eastside property is eligible for the state credit?

• Contact HPD to verify State Register listing or contributing status in a listed district and review district context such as the Santa Fe Historic District, then proceed with HPD’s Part 1 pre-approval process.

What kinds of repairs typically qualify under the New Mexico credit?

• Preservation-focused work like structural stabilization, foundation and roof repairs, repair of historic windows and trim, and needed system upgrades often qualify, while routine maintenance, cosmetic remodels, landscaping, new additions, and demolition usually do not, per HPD guidance at the Historic Preservation Division tax credits page.

What local approvals do I need for exterior work in Santa Fe’s Historic Eastside?

• Most exterior changes require a City of Santa Fe Certificate of Appropriateness and permits, which are separate from state approvals; see the city’s preservation plan reference at the City of Santa Fe historic preservation plan.

How do I claim the New Mexico credit after my Eastside project is certified?

• Individuals file using the appropriate PIT schedule and corporations use CIT schedules, available with instructions on the Conservation and Preservation Tax Credits page, and unused credit can carry forward for four years.

Can I combine New Mexico’s credit with the federal 20 percent historic credit if part of my Eastside property is a rental?

• Yes, the programs are separate, but only income-producing space may qualify for the federal credit; apply to each program separately and review the NPS application process with a tax professional.

What happens if I start work before getting HPD Part 1 approval in New Mexico?

• Costs incurred before Part 1 approval may be ruled ineligible for the state credit, so always secure pre-approval first via the Historic Preservation Division tax credits page.