Should Owners of Historic Homes in Troy, NY Use the State Rehab Credit Before a Spring Sale?

The call came the second week of October, right after the first cold night of the year. A couple who own an 1880s brick house off Second Avenue in Lansingburgh turned the heat on, heard the boiler bang twice, and watched it shut off. They were already planning a spring sale. Now they had a heating quote, a cornice quote, and a question that comes up often with historic homes in Troy, NY: is there any money coming back on this work, and does it matter if we are moving out in six months?

The short answer turned out to be yes, there could be. The longer answer depended almost entirely on the order they did things in.

Where the house sat on the map

The first thing we checked was the address. In February 2023, the City of Troy received notice that the Central Lansingburgh Historic District, which runs from 110th Street to 120th Street, had been added to the National Register of Historic Places. The city’s own page on the district is direct about why it pushed for the listing: it opens the door to historic tax credits for restoration, and listing places no burden on owners unless they choose to use those credits.

The owners had a vague sense the neighborhood had been “designated” but assumed that meant more paperwork and fewer choices. That was the first misconception, and it is a common one. National Register listing by itself did not put a review board between them and their contractor. It gave them access to a state program they had never heard of.

That program is the New York State Historic Homeownership Rehabilitation Tax Credit, run by the Office of Parks, Recreation and Historic Preservation. It is a state income tax credit equal to 20% of qualified rehabilitation expenses. To use it, the owner has to live in the house, the house has to be listed on the State or National Register individually or as a contributing building in a listed district, and it has to sit in a qualifying census tract. Both the listing status and the census tract can be looked up in the state’s Cultural Resources Information System, which is what we did that afternoon. Their house came back as contributing, and the tract qualified.

The rule that almost cost them the whole credit

The heating contractor could start the following Monday. The owners were ready to say yes. That would have been the expensive mistake.

The state’s application instructions say it plainly: all work must be approved before it begins. The application has three parts. Parts 1 and 2, which describe the house and the proposed work, go in together before anything starts. Part 3 goes in after the work is finished, with photos taken from the same angles as the “before” photos. A boiler installed on Monday and written up on Tuesday does not qualify, no matter how historic the house.

The instructions also give the state’s reviewers 30 days to look at an application, and contractor estimates are not required for Part 2. Approximate costs are enough to get the review started. So the real question was whether the house could stay warm for a few weeks while the paperwork moved. With a pair of space heaters on the first floor and a contractor willing to keep the old boiler limping, the answer was yes, barely.

What the numbers looked like on paper

Once the work list was written down, the project looked like this. The credit only counts once the total passes $5,000, and at least 5% of the spending has to be exterior work. The cornice and storm windows covered that easily.

That is close to what a buyer might ask for as a repair credit after an inspection turns up an old boiler.

The window quote they threw out

The original plan included a quote for vinyl replacement windows across the front of the house. The owners liked it because it was one line item and one installer. We asked them to hold it.

The program prioritizes repairing historic material over replacing it, and its own guidance says window replacement is eligible only if the existing windows are not historic or cannot be repaired, and that vinyl or vinyl-clad windows are generally not acceptable. Reviewers measure proposed work against the federal Secretary of the Interior’s Standards for Rehabilitation, and the instructions warn that work that does not meet those standards can put approval of the entire project at risk, not just the one item.

So the vinyl quote would not just have dropped out of the credit. It could have dragged the boiler and the cornice down with it. Repairing the original sashes and adding exterior storms cost a bit more than the owners hoped and took longer to schedule. It also kept the front of the house looking like the rest of the block, which matters to the people who shop for Lansingburgh houses in the first place. Those buyers tend to walk in already knowing what original windows look like.

The two-year question nobody had asked

This is where the spring sale came back into the conversation. The state tax department’s instructions for Form IT-237 say you must own and live in the historic home in the year you claim the credit. They also say that if you move out before the end of a two-year period, starting from the later of the final certification or your purchase date, you have to give back all or part of the credit.

For owners who plan to list in April, that rule changes the math. Claiming $6,600 and then moving four months later would mean handing most of it back. The owners had assumed the credit was theirs once the work was done. It is, but only if they stay.

There was a second path, and it surprised them. According to the state historic preservation office, the credit can pass to a buyer. The seller has to complete all three parts of the application and receive the Certificate of Completion. That certificate then goes to the buyer, who must live in the house and claim the credit within five years of certification.

Here is how the options lined up when we sat down with them in late October.

What they chose, and what it cost them in time

They filed Parts 1 and 2 the third week of October with photos of every side of the house, the boiler room and the cornice. They did not wait to decide between staying and selling. Filing kept both doors open, and the processing fee for Part 2 is small. Approval came back in mid-November, inside the 30-day window. The boiler went in the week before Thanksgiving.

The cornice was the problem. Exterior carpentry and paint on a north-facing Troy facade in December is a gamble, and the contractor would not warranty paint applied below the temperature on the can. That pushed the exterior work to April. Since Part 3 cannot be filed until the work is complete, the certificate could not be issued until late spring at the earliest.

One more fall detail: the credit is claimed for the tax year the certificate is issued, and the state asks for Part 3 by early December to get a certificate that same year. For this project, a 2026 certificate was never realistic.

So the April listing moved to June. That was the honest cost of using the program. A spring sale became an early summer sale, and the owners had to be at peace with that. They also had to accept that, if they did sell, the $6,600 would go to the buyer rather than to them. They decided that a listing that says “new boiler, restored cornice, original windows repaired, state rehabilitation credit certificate transferable to the buyer” was worth more to the sale than a quick boiler swap and a price cut.

Not everything was worth folding in. They had talked about a kitchen refresh, and kitchen cabinets and counters can be eligible expenses. But spending $25,000 to get $5,000 back, on a room the next owner might gut anyway, stopped making sense once the move was likely. We told them that was the line, and they agreed.

The questions that came up along the way

A few questions came up that first week, as they do with most Troy owners who hear about the program for the first time.

Can we get the credit for work we already did last year? No. Approval has to come before work begins, so finished projects do not qualify after the fact.

Can we do the work ourselves to save money? You can, but only materials count. The state’s list of qualified expenses excludes the owner’s own labor, so sweat equity does not earn credit.

Does improving the house raise our property taxes right away? In Lansingburgh, the city points owners to Troy’s 485-v abatement, which phases in tax increases tied to improvements over ten years. It works alongside the historic credit, and the city’s economic development office handles questions about it. For a seller, it is also something a buyer will want to hear about.

What happens to the house value? That one does not have a program answer. The credit does not change an appraisal on its own. A working boiler and a sound cornice do, because they take two of the larger inspection objections off the table. When the owners asked us to run the sale numbers both ways, we used the same estimate of their walk-away value after a sale that we would use for any seller. The gap between “repaired and certified” and “as-is with a price cut” was wider than the credit itself.

Owners weighing a similar choice on a house that needs more than three items may find our earlier piece on whether to fix up or sell a home as-is useful, since most of the same tradeoffs apply on the Troy side of the river. Buyers looking at row houses downtown face a different set of tax questions, which we walked through in a story about Troy’s downtown blocks near Prospect Park.

What the story changed about how we talk to Troy owners in October

Most of the owners we work with in Lansingburgh, Central Troy and the other listed districts have never been told the program exists. The ones who have often hear about it after the contractor has already started. October is when the furnace and boiler calls come in, and it is also the month when the order of operations matters most. A month of paperwork before the work starts is what separates a 20% credit from nothing.

The decision is not automatic. If you are moving within two years and do not want to delay a sale, the program may not fit. If you are staying, or are willing to hand the certificate to the next owner, it often does. With historic homes in Troy, NY, the house usually tells you what it needs. The program decides whether you get some of that money back.

If you own an older house and want to talk through how a sale might look, you can find our Troy, NY real estate services here.

Sources

1. New York State Historic Homeownership Rehabilitation Tax Credit Program, NYS Office of Parks, Recreation and Historic Preservation
2. Historic Homeownership Rehabilitation Credit Application Instructions and List of Qualified Expenditures (rev. 6/2025), NYS OPRHP Division for Historic Preservation
3. Instructions for Form IT-237, Claim for Historic Homeownership Rehabilitation Credit, NYS Department of Taxation and Finance
4. Central Lansingburgh Historic District, City of Troy Planning and Economic Development
5. Historic District Guidelines, City of Troy
6. The Secretary of the Interior’s Standards for Rehabilitation, National Park Service