1. Short title This Act may be cited as the Preserving America’s Downtowns and Heritage Act of 2017 . 2. Increased rehabilitation credit for commercial buildings (a) Buildings other than certified historic structures Paragraph (1) of section 47(a) of the Internal Revenue Code of 1986 (relating to rehabilitation credit) is amended by striking 10 percent and inserting 12.5 percent . (b) Certified historic structures Paragraph (2) of such section is amended by striking 20 percent and inserting 25 percent . (c) Effective date The amendments made by this section shall apply with respect to rehabilitations the physical work on which begins after the date of enactment of this Act. 3. Rehabilitation credit for historic principal residences (a) In general Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section: 25E. Rehabilitation of historic principal residences (a) General rule In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 20 percent of the qualified rehabilitation expenditures made by the taxpayer with respect to a qualified historic home. (b) Qualified rehabilitation expenditure For purposes of this section— (1) In general The term qualified rehabilitation expenditure means any amount properly chargeable to capital account— (A) in connection with the certified rehabilitation of a qualified historic home, and (B) for property for which depreciation would be allowable under section 168 if the qualified historic home were used in a trade or business. (2) Certain expenditures not included Rules similar to the rules of clauses (ii) and (iii) of section 47(c)(2)(B) shall apply. (3) Mixed use or multifamily building If only a portion of a building is used as the principal residence of the taxpayer, only qualified rehabilitation expenditures which are properly allocable to such portion