On November 19, 1996 an amendment to the Land Development Regulations was passed by the City Commission to allow for a property tax abatement on approved renovation and rehabilitation of historic buildings. The City joins Palm Beach County in adopting this financial incentive for owners of historic property. The tax abatement applies to the increase in assessed value that results from improvements made to historic buildings. The tax relief is available to owners of qualifying residential and commercial properties for a period up to ten years.
The City of Delray Beach and Palm Beach County have established a property tax abatement program to encourage the preservation and rehabilitation of properties that are historically significant because of their age, design, or events that took place in and around them. When historic properties are properly cared for and rehabilitated, they can make important contributions to the quality and variety of our environment. They can provide unique settings for business, shopping, housing, entertainment and education.
The program is designed to encourage private investment in historic properties, neighborhoods, and traditional commercial districts. The improvement of declining residential neighborhoods and commercial areas has a beneficial effect on the entire community by preserving tangible links with its roots, improving its image, fostering civic pride, and improving its overall economic well being.
The program is available to owners of historic properties (50 years or older) located within historic districts or those individually listed in the Local Register of Historic Places. The exemption is available for 100% of the assessed value of qualified improvements made to the property, and for a period of up to 10 years.
For example, if the property is assessed by the Palm Beach County Property Appraiser's office for $100,000 and $25,000 of qualifying rehabilitation improvements are made, the $25,000 will not be assessed for tax purposes for a period of 10 years. At the end of 10 years the property will be assessed at its full value, which will include the $25,000 of rehabilitation costs.
- The exemption is available for owner occupied residences and for income producing properties.
- Part of the overall project must include visible improvements to the exterior of the structure.
- The property owner must agree to maintain the qualifying improvements and the character of the property for the period of the exemption.
- Should the property be sold during the exemption period, the tax exemption is passed on to the new owner.
A property owner is required to submit a pre-construction application, in addition to the standard Certificate of Appropriateness (COA) application, to the Planning & Zoning Department. Applications for improvements to the property are evaluated by the Historic Preservation Board (HPB) through the regular COA review process, and must be consistent with the Secretary of the Interior's Standards for Rehabilitation. The exemption is not retro-active. Properties that have already been improved are not eligible for the program, as all qualifying projects must commence after the pre-construction application is approved. Historic properties located within the Community Redevelopment Agency's (CRA) taxing district are eligible for the tax abatement program providing they do not participate in the CRA's interest free loan rehabilitation program.
To help historic property owners determine the advantages of the tax abatement program we have provided the following formula to calculate the tax saving on proposed rehabilitation in terms of the bottom line - tax dollars saved over a 10 year period.
- Determine the approximate amount of money to be spent on qualifying improvements, for example, $25,000.
- Multiply 25 by 11.50 (approximate City & County tax millage eligible for abatement).
$ 11.50 x 25 = $ 287.50 tax savings per year.
$ 287.50 x 10 years = $2,875.00 tax savings over 10 years.
For additional information on this program or other historic preservation activities, please contact our Assistant Historic Preservation Planner at:
Telephone: (561) 330-7040
Email: Abe Fogel