This document summarizes tax incentives available for substantial rehabilitation of historic landmarks and properties within historic districts in San Antonio, Texas. It outlines two main tax incentive options - a 10-year tax freeze and a 5-zero/5-fifty incentive. The 10-year tax freeze freezes a property's taxable value at its pre-rehabilitation value for 10 years, saving an estimated $300 in taxes in the first year and over $3,000 total. The 5-zero/5-fifty option exempts property taxes for the first 5 years and assesses taxes at 50% of the post-rehabilitation value for the next 5 years, saving an estimated $900 in the first year and over $5

1. Tax IncentivesTax Incentives
for
S b i l R h bili iSubstantial Rehabilitation
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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
completion
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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 cities
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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 application
Receive Certificate of Appropriateness– Receive Certificate of Appropriateness
• Do the work
C l t k d th– Complete work approved on the
Certificate of Appropriateness
– Document progress (photographs)
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Document progress (photographs)

5. Verification ProcessVerification Process
• Once work is completeOnce work is complete
– Submit: “after” photos, receipts, Tax
Verification applicationVerification application
– Choose your tax incentive
(commercial properties get one option,(commercial properties get one option,
residential get two)
– Staff will notify Bexar Countyy y
Appraisal District of approved
exemption
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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 value
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rehabilitation 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 y
than $3,000
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8. How it works (10 Year Tax Freeze)
A i l i d $6 910Appraisal increased $6,910
after rehabilitation
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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)
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may continue to increase)

10. How it works (5‐Zero/5‐Fifty)How it works (5 Zero/5 Fifty)
• BCAD.orgBCAD.org
• 2012
Appraised Value
• No city taxes
2013 t 20172013 to 2017
• 2011
Improvement
Value
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11. Federal Tax CreditsFederal Tax Credits
• 20% Federal Tax Credit20% Federal Tax Credit
– Certified rehabilitation of a certified historic
structure
– 20% of the project costs (discount from total
taxes owed))
– Commercial structures only
Federal Tax Credits are administered
through the Texas Historical Commission
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g
(THC) and the National Park Service (NPS)

12. 2012‐2013 Examples2012 2013 Examples
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