Your SlideShare is downloading. ×

Tax Incentives for Substantial Rehabilitation

124

Published on

Published in: Real Estate, Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
124
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Tax IncentivesTax Incentivesfor S b i l R h bili iSubstantial Rehabilitation1
  • 2. Substantial RehabilitationSubstantial Rehabilitation• Historic Landmarks and propertiesHistoric Landmarks and properties within historic districts• Credit for interior and exterior workCredit for interior and exterior work that extends the life of the property• All work must be approved by HDRCAll work must be approved by HDRC• Project must be Certified before work begins and Verified afterwork begins and Verified after completion2
  • 3. Substantial Rehabilitation• Allow tax incentive to remain with property (so if thewith property (so if the property is sold, new owner can receive incentive)can receive incentive)• Encourages investors to rehabilitate propertiesrehabilitate properties• SA tax incentive consistent ith th TX itiwith other TX cities3
  • 4. Certification ProcessCertification Process• Submit project to HDRCSubmit project to HDRC – Include:  “before” photos, estimated costs, scope of work, construction documents, BCAD current appraisal, Tax Certification applicationReceive Certificate of Appropriateness– Receive Certificate of Appropriateness• Do the workC l t k d th– Complete work approved on the Certificate of Appropriateness– Document progress (photographs)4Document progress (photographs)
  • 5. Verification ProcessVerification Process• Once work is completeOnce work is complete– Submit: “after” photos, receipts, TaxVerification applicationVerification application– Choose your tax incentive(commercial properties get one option,(commercial properties get one option,residential get two)– Staff will notify Bexar Countyy yAppraisal District of approvedexemption5
  • 6. Tax Incentive Choices• 10 Year Freeze10 Year Freeze‐ City portion of taxable value frozen at   “before” valuebefore  value• 5‐Zero/5‐Fifty5 Zero/5 Fifty– No City property taxes are owed for the first five (5) years – For the next five (5) years, City property taxes are assessed at a value that is 50% of the post‐rehabilitation assessed value6rehabilitation assessed value
  • 7. ExamplesExamples• 10 Year Tax Freeze10 Year Tax Freeze– Approximately $300 in tax savings in 2010savings in 2010– Over 10 years will become more valuable (assumingmore valuable (assuming appraised value increases)– Over 10 years will save more ythan $3,0007
  • 8. How it works (10 Year Tax Freeze)A i l i d $6 910Appraisal increased $6,910after rehabilitation8
  • 9. ExampleExample• 5‐Zero/5‐Fifty– Approximately $900 in taxes saved in 2010– Approximately $5,000 in first 5 years– Approximately $3,000 in next 5 years (taxable value has d bincreased since 2011 by approximately $70,000 and may continue to increase)9may continue to increase) 
  • 10. How it works (5‐Zero/5‐Fifty)How it works (5 Zero/5 Fifty)• BCAD.orgBCAD.org• 2012Appraised Value• No city taxes 2013 t 20172013 to 2017• 2011 Improvement Value10
  • 11. Federal Tax CreditsFederal Tax Credits• 20% Federal Tax Credit20% Federal Tax Credit– Certified rehabilitation of a certified historicstructure– 20% of the project costs (discount from totaltaxes owed))– Commercial structures onlyFederal Tax Credits are administeredthrough the Texas Historical Commission11g(THC) and the National Park Service (NPS)
  • 12. 2012‐2013 Examples2012 2013 Examples12

×