Incentives for Historic Preservation
 

The City of Mesa participates in a State and Federal program, the Certified Local Government (CLG) program, that provides technical and financial assistance for preserving historic buildings. Incentives offered through City, State, and Federal programs to encourage historic preservation include:

• Collective voice on issues affecting neighborhoods;
• Special provisions for modification of building code regulations;
• Conservation and preservation easements allowing limited tax benefits;
• Federal investment tax credits;and
• State and County property tax reduction program.

State Property Tax Reclassification

Federal Tax Incentives

Frequently Asked Questions

Q. What about restrictions on my property?

A. For houses listed on the National Register, there are none.

There is often the common misconception that listing on the National Register results in restrictions against a property owners ability to make renovations, modifications and in some cases, demolition of a property.

The National Register of Historic Places is nothing more than a prestigious list of historic places, structures and things throughout the United States. The National Register is both powerful and powerless. It's power is related to the prestige and notoriety it brings a building often resulting in heightened public awareness, tourism and civic-pride. It is powerless because it has no control over localities or states; it can only wait for nominations and then pronounce them. There are no restrictions as to land use, adaptive reuse, renovation or modification. A property could be listed on the National Register today and be demolished tomorrow.

However, historic properties are eligible for hefty tax credits. In order to be eligible for those credits, renovations and/or modifications must be made according to the Secretary of Interior's Standards for Rehabilitation. This is generally where most people make the mistake of correlating rehabilitation guidelines to restrictions on their property.

Q. What about restrictions through zoning?

A. A six-month stay of demolition. Historic Preservation Office reviews additions/changes/modifications...and we can assist you...we have design guidelines so your house's historic status is not compromised.

A local historic preservation zoning overlay can be placed on properties but must be done by neighborhood residents petitioning the City to do so. Such an overlay does establish a six-month stay of demolition on any historic property or contributing property to a district. This short-term moratorium allows the Historic Preservation Committee and Officer the time to find an alternative to demolition--if there is one. Nonetheless, if no resolution can be reached within the six-month timeframe, a demolition permit must be approved.

The Historic Preservation Office reviews all changes/modifications/alterations and additions to contributing properties to historic districts.  Appeals can be made to the Historic Preservation Committee but to date the Historic Preservation Office has never denied a building permit.  In fact, most property owners are delighted to have a resource to turn to.  We have developed design guidelines to help property owners make the right choices--even down to how to choose a contractor and whether or not a project will "pencil out."  

Also, Historic Preservation, despite its importance to our society, is not always the first choice for developers and homeowners alike. It takes a willing commitment from individuals to do so. In order to encourage historic preservation, the federal government (and sometimes the states) offers substantial tax breaks.  Therefore, by encouraging homeowners to maintain their property's historic integrity, tax breaks are offered.

Q. So my house is considered historic and I haven't altered it in some unique way, what kind of break can I get on my property taxes?

A. You can apply for a substantial reduction in your property taxes.

Provided certain requirements are met, owner-occupied, non-commercial, contributing properties (or individually eligible properties) may apply for Class 8 designation status from both the County and the State. Property taxes will be calculated at 5% instead of 10% of the assessed value of the property. Designation as Class 8 may be granted only for fifteen consecutive tax years immediately following the calendar year in which the application is filed. During the final year of the fifteen-year period, applicants may apply for a continuation of the classification for a succeeding period of fifteen years. Applications, proposed property renovations to Class 8 properties, and eligibility criteria are reviewed and approved or denied by the State Historic Preservation Office. Failure to maintain the property in a manner consistent with the minimum standards of maintenance established by SHPO will result in revocation of Class 8 status. Class 8 status is transferable owner-to-owner, so long as the property continues to qualify. If a property becomes disqualified, a penalty will be levied on the next year's taxes that is equal to the lesser of: 50% of the total amount by which property taxes were reduced during the years the property had been classified as Class 8 Historic, or 50% of the market value of the property. If the owner fails to notify the County of such disqualification, additional penalties will be applied. SHPO may require annual reports from the Class 8 property owners. (Source: Arizona Department of Revenue Division of Property Valuation & Equalization and A.R.S. § 42-12101 through 42108.) Other conditions apply for commercial historic properties and are not discussed in this report. This is a synopsis of the law and should not be construed as setting forth all stipulations. Property owners should contact the Maricopa County Assessors Office directly for specific information.

In Mesa homeowners who own historic properties in a registered historic district can apply for Class 8 designation at:

Maricopa County Assessors Office
943 S. Gilbert
Suite 200
Mesa, Arizona 85204
602-506-3406

Q. Are there other tax breaks?

A. Yes. There are federal income tax breaks.

Once again, provided certain conditions have been met, income-producing historic properties listed on the National Register can deduct a percentage of their approved restoration expenses directly from their taxable income on income tax statements. An accountant should be consulted about the specific forms and documentation that needs to be filled out. You can receive some general information from the State Historic Preservation Office by contacting:

Erika Finbraaten
Preservation Incentives Program Coordinator
State Historic Preservation Office
1300 W. Washington Street
Phoenix, Arizona 85007
602-542-6998