Imagine you donate a portion of your land to a nonprofit conservation trust. You're likely to receive a hefty tax break due to the deduction borne of your charitable donation, and you'll also pay less property tax due to the decrease in your property value (remember: you donated a chunk of it, so what remains is worth less).
The same is true of developed property. Often, if you own a historic property, you can work out a way to donate its facade, interior, landscaping or any other feature that makes it historic. Imagine you deed the front of your historic property to a preservation organization. The value of your property's facade is a charitable donation. And this same value is technically deducted from your home value, reducing your property taxes. Again, you pay for these tax benefits in the form of renovation restrictions.
For more information, check out the links below.
- Emery, John K. "What Makes a Property Historic?" (March 15, 2011) http://www.jkemery.com/HistoricHomes
- Illinois Historic Preservation Agency. "Property Tax Assessment Freeze." 2007. (March 15, 2011) http://www.illinoishistory.gov/ps/taxfreeze.htm
- Internal Revenue Service. "Publication 526." (March 15, 2011) http://www.irs.gov/publications/p526/ar02.html
- Internal Revenue Service. "Rehabilitation Tax Credit -- Real Estate Tax Tips." Feb. 9, 2011. (March 15, 2011) http://www.irs.gov/businesses/small/industries/article/0,,id=97599,00.html
- Koreto, Richard J. "Tax incentives for historic preservation." Will Nesbitt Realty LLC. Jan. 2, 2010. (March 12, 2011) http://condo-alexandria.com/2010/01/02/tax-incentives-for-historic-preservation/
- National Park Service. "Historic Preservation Tax Incentives." (March 12, 2011) http://www.nps.gov/hps/tps/tax/hpcappl.htm
- National Park Service. "National Register of Historic Places." (March 12, 2011) http://nrhp.focus.nps.gov/natreghome.do?searchtype=natreghome
- National Park Service. "What are the Secretary of the Interior's Standards for Rehabilitation that are used to evaluate projects that apply for the 20% tax credit?" (March 12, 2011) http://www.nps.gov/hps/tps/tax/incentives/essentials_4.htm
- National Trust for Historic Preservation. "Preservation Contacts." (March 12, 2011) http://www.preservationnation.org/contacts/
- National Trust for Historic Preservation. "State Rehabilitation Tax Credits." (March 12, 2011) http://www.preservationnation.org/issues/rehabilitation-tax-credits/state-rehabilitation-tax.html
- Preservation North Carolina. "Preservation Easements." (March 12, 2011) http://www.presnc.org/Property/Preservation-Easements
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