Tax Benefits Of Owning A Historic Home

If you own a Historic home, make sure you’re looking into and know what your tax benefits are.  The county will have all of this information on their websites.  However, we have pieced some of the details below for you to make sure your not missing out.

Historic resources are viewed as “public benefits” to our neighborhoods and are therefore eligible for fiscal benefits to counterbalance their assumed burden to property owners. Historic preservation is an essential component for future development strategies as they provide a sense of place, property value protection and enhancement, and contribute positively to wider sustainability and resiliency goals.

Ad Valorem Tax Exemption 

The Ad-Valorem Tax Exemption is an incentive that is provided by state and County law that is intended to encourage the rehabilitation and maintenance of historic structures. It is an exemption only on the amount that the taxes would have increased, due to the improvements made to a historic property. 

WHO: In order to be eligible for the tax exemption, properties must be listed in the National Register of Historic Places, or a locally designated historic structure (designated by the County’s historic preservation board or by a local municipality’s preservation board) and must be about to undergo restoration and/or rehabilitation. 

WHAT: The Ad-Valorem Tax Exemption is a financial incentive that is intended to encourage the rehabilitation and maintenance of historic properties and provides a 10-year abatement of property taxes on the improvements. The Ad-Valorem Tax Exemption does not give the property owner a total exemption from all of their taxes. It is an exemption only on the amount that the taxes would have increased, due to the improvements made to a historic property. 

WHEN: Miami-Dade County offers the ad valorem property tax exemption, which exempts 100% of the assessed value of all qualified improvements to historic properties for a period of 10 years. 

WHERE: If you are filing for a municipal tax exemption as well, a separate application must be filed with that municipality. Currently Miami, Miami Beach, Coral Gables and South Miami offer tax exemptions on the municipal portion of the taxes. 

WHY: The rehabilitation of Miami-Dade County’s historic resources require considerable time, effort and expenses to maintain and enhance their historic character. Through tax exemptions, the financial burden is lessened for property owners, incentivizing investment in historic rehabilitations and restorations.

How to apply: Property owners need to complete and submit Part I applications to the Miami-Dade County Historic Preservation office for approval previous to any construction. After approval of Part I, and construction is completed, Part II may be submitted for final approval by the Board of County Commission. 

Links:

http://www.miamidade.gov/planning/tax-exemption-ad-valorem.asp

https://www.miamidade.gov/planning/library/forms/ad-valorem-tax-exemption-historic-preservation.pdf

“Actual Use” Tax Assessments 

Owners of historic buildings may also be eligible for an alternative method of assessment by the Miami-Dade County Property Appraiser. This alternative method allows the property to be assessed based on the actual use rather than highest and best use, which may have an effect in lowering property taxes. 

WHO: To be eligible the property must be officially designated as historic either by local ordinance or listing on the National Register of Historic Places. It also must be commercial in nature (apartment buildings are not included) and be open to the public at least 40 hours per week for 45 weeks per year or the equivalent of 1,800 hours per year. 

WHAT: This alternative method allows the property to be assessed based on the actual use rather than highest and best use, which may have an effect in lowering property taxes. 

WHEN: To claim this benefit, property owners of qualifying properties must file an application with the Miami-Dade County Department of Property Appraisal by March 1 of each year. 

WHERE: The benefit applies only to the Miami-Dade County portion of the tax bill. 

WHY: Many historic resources cannot utilize their “highest and best use” due to regulatory restrictions. This alternative allows those historic resources within compliance to remit a fairer tax payment based on actual use.

How to apply: To find out if your property qualifies, contact the Property Appraisers Office.

Link: https://www.miamidade.gov/pa/

Now that you have some of the inside scoop, make sure you have the knowledge and documents with you when you visit your tax accountant to get your credits.

If you are looking to buy, sell, or have any questions regarding Miami Historic Homes, call 305-986-7041 or fill out the contact form. We would love to connect with you regarding your interest in Historic homes and we specialize in renovating, researching, purchasing or selling Historic Homes in South Florida.