HomeMy WebLinkAboutFact Sheet SR/FRFACT SHEET:
HISTORIC All VALOREM TAX EXEMPTION
City Commission meeting of May 10, 2007
Background
In 1992 Florida voters overwhelmingly passed a constitutional amendment allowing
municipalities the local option of providing tax exemptions for the ad valorem portion of
their taxes for improvements to historic properties. (The exemption applies only to the
taxes levied by the unit of government, and does not apply to taxes levied for the
payment of bonds, school board, etc.) Since that time, Miami -Dade County, and the
cities of Miami Beach and Coral Gables, have enacted ordinances allowing such
exemptions. Regionally, Broward and Palm Beach Counties also offer the tax exemption.
In October 2006, Commissioner Linda Haskins asked the city to study the possibility of
including such an exemption for Miami's historic properties. The Planning Department
had prepared a White Paper which summarized the basic provisions of the program. The
City Commissioners all expressed their enthusiasm for the initiative and directed the staff
to prepare an ordinance for historic ad valorem property exemptions. In their discussion,
the commission noted how difficult and costly the maintenance of historic properties has
become, and their hopes that this initiative would assist in preserving Miami's unique and
irreplaceable historic monuments.
Effect
This ordinance gives the City of Miami the authority to exempt the city's ad valorem
portion of a property tax bill, for only the value of the improvements to historic
properties.
Purpose
To encourage preservation and rehabilitation of properties that are historically significant
because of their age, design or events that have taken place in and around them; and to
assist in the revitalization of older neighborhoods and commercial areas.
Eligible Properties
All residential and commercial properties listed in the National Register of Historic
Places or an individual building (residential or commercial), or contributing building
(residential or commercial) within a City of Miami local historic district.
Special Provision for Government or Non -Profit Usc.
The city may grant 100% of the assessed value of the property as improved, when that
property is used by a governmental or non-profit agency. The qualification of a -property
under this section is particularly strict, and the applicant must provide evidence that at
least 65 4 of the building's usable space is dedicated to the government or non-profit use,
and that the building is frequently open to the public (not less than 52 days a year).
Process
Pre -Construction (Part I)
The City of Miami's Historic Preservation Section accepts a "pre -construction"
application from the owner of a historic property making improvements. There is a non-
refundable $250.00 application fee. The application sets out exactly what the changes
are, and is accompanied by photographs and architectural drawings. Following staff
review, the item is taken to the Historic and Environmental Preservation Board (HEP
Board), who may review it simultaneously with an application for a Certificate of
Appropriateness. Following its approval, the owner has two years to complete the
construction.
Completed Construction (Part II)
The applicant provides the Historic Preservation Section with photographs depicting the
completed work, illustrating its compliance with the project described in the Part I
application. After staff review to ascertain its compliance or deviation from the approved
scope of work, the HEP Board makes a recommendation to the City Commission to
approve or deny the application.
City Commission Review/ Covenant Executed
The item is scheduled before a regular meeting of the City Commission. Accompanying
the application and recommendation is a Covenant between the city and the applicant.
The covenant insures that the applicant will maintain the improvements for which the
exemption was granted, for the entire period of the exemption. The Commission votes
to approve or deny the application , and while most communities allow the full 10 years
for the exemption on the improvements, the Commission has the authority to grant a
lesser term.
Safeguards
Should the owner fail to maintain the improvements for which the exemption was
granted, a hearing before the HEP Board is conducted at which the details of the non-
compliance are addressed. The HEP Board will then recommend to either keep the
exemption in place or to revoke the exemption. With the recommendation of the HEP
Board, the City Commission will then make the decision as to whether the exemption is
revoked. Should the commission decide to revoke the exemption for cause, following
that resolution, the historic preservation officer will notify the Miami -Dade County
Property Appraiser's office, who will take the appropriate action to terminate the
City Commission Agenda Item
Historic Ad Valorem Tax Exemption
Fact Sheet
Page 2
exemption, and forward the information to the tax collector, who will recapture any .
previous taxes that were already exempted.
Fiscal Impact
There is no change to the existing tax base as a result of this incentive (with the exception
of the governmental and non-profit provisions), as the exemption applies only to the
assessed value of the improvements. The Planning Department has compiled data that
identifies the number of structures that are currently eligible for this incentive if adopted,
along with an estimation of the potential future revenue impacts.
Summary
The historic ad valorem tax incentive has proven itself a highly successful tool to
encourage the preservation of historic properties throughout the state of Florida, with a
minimal impact to city revenues. With today's enormous development pressures, the
relatively small loss in any future revenue will be more than offset by the positive impact
on the City through the recognition of its invaluable heritage.
City Commission Agenda Item
Historic Ad Valorem Tax Exemption
Fact Sheet
Page 3