Local Tax Incentives
The Historic Property Ad Valorem Tax Exemption is designed to encourage the preservation and rehabilitation of properties that are historically significant. The exemption is available to owner occupied residences and/or income producing properties that are historically contributing to a historic district or those individually listed in the Local Register of Historic Places.
The Historic Preservation Ad Valorem Tax exemption is available for 100% of the assessed value of qualified improvements made to 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.
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.
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. 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.
Federal Tax Incentives
Federal Historic Tax Credits are available through the National Park Service for the qualified rehabilitation of historic properties, which are located within a National Historic District or listed on the National Register of Historic Places (owner occupied residential properties do not qualify).
A proposed rehabilitation needs to qualify with federal standards and guidelines, and is reviewed by the State of Florida Division of Historical Resources, prior to review at the local/city level.
The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation's most successful and cost-effective community revitalization programs. It has leveraged over $96.87 billion in private investment to preserve more than 40 thousand historic properties since 1976. The program offers up to a 20% tax deduction for approved modifications made to historic properties.
The National Park Service and the Internal Revenue Service administer the program in partnership with State Historic Preservation Offices.