ALBANY – Drive down the streets within the newly designated Elmwood West Historic District in Buffalo, and it might not be hard to find contractors doing everything from exterior rehabilitation work to installing new windows to putting in new furnaces.

For homeowners in the neighborhood, the work comes with dual incentives: new access to a money-saving state tax credit program and the benefit of improving the look of both their houses and their community.

“It’s very hard to keep these houses up. It’s always easier to say we’ll build a new house in Clarence, but, for me, these programs are critical for investing in an urban core,” said Jeremy C. Toth, who used a state historical rehabilitation tax credit now available within the new historic district for several projects in his approximately 120-year-old Ashland Avenue house that he otherwise would not have been able to afford.

Last week, Gov. Andrew M. Cuomo proposed an amendment to his 2013 budget plan to extend the life of the residential tax credit program for five years – a move expected to easily pass the State Legislature. Proponents say that it will provide a longer time frame for homeowners living in a historically designated structure, or one within a historic district on a state or federal registry, so they can better afford home improvements and will increase the value of properties in a neighborhood.

“This allows people to invest in houses that otherwise might not make economic sense and allows them to do it in a way that preserves the value of the neighborhood,” said Assemblyman Sean M. Ryan, D-Buffalo.

For example, instead of installing cheaper, plastic-framed windows on a historic house, the tax credit program would subsidize the cost of more expensive and historically accurate wood-frame windows to match the house.

“This program allows them to do the work in a way that keeps the character of the house and neighborhood, so it keeps the fabric of the neighborhood intact,” Ryan added.

In January, the governor proposed extending a tax break program to encourage rehabilitation of commercial structures, but his budget plan was silent on an existing program for residential buildings due to expire next year. That changed last week with a series of amendments he made to his plan under a legally authorized 21-day amendment period.

The tax credits amount to 20 percent of qualified expenses of at least $5,000 and not more than $50,000. So a $10,000 roof project on a qualified home would be worth $2,000 in state tax credits for a homeowner on a personal income tax filing. Under the program, at least 5 percent of a project’s work would have to be on the exterior.

Requirements include that the structure be owner-occupied, listed on the state or national registry of historic places and be located in a federal census tract at or below 100 percent of the state median income level – a provision that makes most upstate historic structures or neighborhoods eligible.

Credits can go for work on floors, exterior and interior surfaces, windows, chimneys, heating and cooling systems, roofs and doors, according to the New York State Historic Preservation Office. Such costs as appliances, furniture, demolition expenses and landscaping are not covered. Work must be preapproved by the state Office of Parks, Recreation and Historic Preservation.

Backers say Cuomo’s plan is important because the current law would require homeowners to get the work completed this year in order to qualify for the credits before they expire next year. This gives a five-year extension through the tax year 2019 if it, as expected, gets approved in the final budget plan due by March 31.

In 2010, the state spent only $500,000 on the residential tax program, according to the state Department of Taxation and Finance. This year, it expects to give about $3 million in credits, and that number could grow significantly the more people hear about the program and the more neighborhoods are deemed historic.

While individual structures listed on historic registries are eligible, getting such designations can be expensive. With the lure of the tax incentives, more and more neighborhoods are looking at their own historic designations.

In the new Elmwood district, about 2,000 structures – from houses to barns – could have work qualify for the tax credits. The district is bounded roughly by Richmond Avenue, Summer Street, Forest Avenue and Elmwood.

Within a couple months of the creation of the district, 20 families immediately undertook1enovation work to take advantage of the tax break, said Kenneth A. Rogers, chairman of the effort to get the area deemed a National Register Historic District.

“There are two fundamental values. One is obvious: keeping historic characteristics of a neighborhood intact, which is worthwhile in itself because it is Buffalo. It is what makes up our community,” said Rogers, who used credits to restore a kitchen and do window work. “It is an economic-development tool,” he said. “This is putting local contractors to work.”