Florida’s Historic Preservation Property Tax Exemption

By: Quentin E. Morgan

Quentin E. MorganThe old axiom that “Those who do not study history are condemned to repeat its mistakes,” does not apply to property in the State of Florida.  Maintaining and recognizing pieces of the past, as a display of all the outstanding achievements of men and women who have made significant contributions to this state, will not be condemned but rewarded.  One way to recognize and preserve the past is to preserve and enhance buildings and homes that have contributed to and represent what it means to be a Floridian.  To that end, the people of Florida have created a financial incentive to conserve and enhance Florida’s historic buildings and homes.  This incentive is codified through the Florida Constitution and State Statutes in the form of a tax exemption.  Florida’s historic preservation property tax exemption is a permissive provision of the Florida Constitution and State Statutes, only applicable when your local government has authorized the exemption.

There are three areas of State law that authorize local governments to adopt ordinances allowing a property tax exemption for historic properties:

  1. Section 196.1961, Florida Statutes, implements the Florida Constitutional provisions allowing historic property tax exemptions by authorizing the governing authority of a local government to adopt an ordinance allowing an ad valorem tax exemption of up to 50 percent of the assessed value of property that meets all of the statutory criteria.  The statutory criteria include: (a) The property must be used for commercial purposes or used by a not-for-profit organization under Section 501(c)(3) or (6) of the Internal Revenue Code of 1986; (b) The property must be listed in the National Register of Historic Places, as defined in Section 267.021; or must be a contributing property to a National Register Historic District; or must be designated as a historic property or as a contributing property to a historic district, under the terms of a local preservation ordinance; and (c) The property must be regularly open to the public.
  2. Section 196.1997, Florida Statutes, implements the Florida Constitutional provisions that allow a property tax exemption for up to 100% of the increase in assessed improvements resulting from an approved rehabilitation of a qualified historic property.  The exemption may remain in effect for up to 10 years.  Qualified properties may be residential or commercial and must be either individually listed in the National Register of Historic Places, a contributing building in a National Register District, or designated as historic under the provisions of a local preservation ordinance.  In addition, the rehabilitation work must be in accordance with the Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings for which the ordinance makes the appropriate reference.
  3. Section 196.1998, Florida Statutes, could apply if an improvement qualifies a historic property for an exemption under Section 196.1997, and the property is used for nonprofit or governmental purposes and is regularly and frequently open for the public’s visitation, use, and benefit, the board of county commissioners or the governing authority of the municipality by ordinance may authorize the exemption from ad valorem taxation of up to 100% of the assessed value of the property, as improved; provided, however, that the assessed value of the improvement must be equal to at least 50% of the total assessed value of the property as improved. The exemption applies only to real property to which improvements are made by or for the use of the existing owner.  In order for the property to qualify for the exemption provided in this section, any such improvements must be made on or after the day the ordinance granting the exemption is adopted.

The State Division of Historic Resources reviews applications for the property tax exemption unless the local government is a Certified Local Government, which means it has a local historic preservation program which has been certified by the Florida Department of State, Division of Historical Resources, in accordance with the National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.).  Upon qualifying for an exemption, the property owner will be required to execute a covenant on a form provided by the State.

Owners of historic properties spend considerable time, effort and expenses to maintain and enhance the character of their properties.  The growing public interest in preservation has been recognized and supported through tax exemptions, thereby easing the financial burden for keeping the windows to the past open for public view.

Quentin Morgan is an attorney with the law firm of Brinkley Morgan, with offices in Fort Lauderdale and Boca Raton.  He focuses his practice on governmental affairs, land development, local government law, estate, business and financial transactions, litigation, and wills, trusts and probate proceedings. 

The material appearing on this blog is meant to provide general information only and is not a substitute for nor is it legal advice to you. With regard to specific law issues, readers of this article should seek specific advice from legal counsel of their choice. Articles may not be reprinted without the express permission of Brinkley Morgan.

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By |2017-03-13T13:31:10-05:00November 19th, 2014|Blog, Local Government Law and Relations, Taxation|