Do you remember that part about the impossibility of getting something for nothing? Well, in exchange for tax breaks, historic properties are commonly required to self-impose some restrictions on use and (especially!) renovations.
For example, take the facade easement. In this case, the owner of a historic property effectively donates the property's facade to a historic preservation organization. This donation counts as a charitable contribution and thus a tax write-off, and without the property's facade, the easement should reduce the selling price of the historic property. So you'll certainly want to check for any easements filed with the deed of any potential historic property you're thinking about buying. Ask if easements are indefinite or for a fixed period of time, and also ask about the tax implications of any easements you find.
Again, this might be a good thing -- you get the home at a lower price, so you'll pay lower property taxes and live in a property with a guaranteed historic facade. Or it can be a bad thing -- if you want to renovate that facade significantly, you're going to have to jump through some significant, potentially fiery hoops. Depending on the type of easement filed, it may apply to the property's facade, interior, structural characteristics, landscaping or -- really -- anything that makes the property historic.
The moral of the story is that historic properties require one extra level of checking before you buy. What's riding along with the house's title? If nothing, you're good to go. (Perhaps you should explore the tax advantages of historic properties yourself!) But if there are riders, weigh the pros and cons of these attachments to make sure the headache of owning the historic property is worth the benefits.
For more information on historic property and taxes, check out the links below.
- Advisory Council on Historic Preservation. "Federal Financial Assistance for Historic Preservation Projects -- Community and Economic Development Programs: Housing." May 16, 2008. (March 15, 2011)http://www.achp.gov/funding-comm-housing.html
- National Park Service. "National Register of Historic Places." (March 15, 2011)http://nrhp.focus.nps.gov/natregadvancedsearch.do?searchtype=natregadvanced
- National Park Service. "State Historic Preservation Officers (SHPO)." (March 15, 2011)http://www.nps.gov/nr/shpolist.htm
- Preservation North Carolina. "Preservation Easements." (March 12, 2011)http://www.presnc.org/Property/Preservation-Easements