I’ve been doing some new research on historic homes for our AlphabetDistrict website. The Special Assessment of Historic Property Program is managed by the Parks and Recreation Department’s State Historic Preservation Office (SHPO). Last year, Senate Bill 192 changed some features what is commonly known as the historic tax freeze. The SHPO Program Information sheet explains:
The Special Assessment Program is a state-sponsored incentive program instituted in 1975 to encourage the preservation and appropriate rehabilitation of properties listed in the National Register of Historic Places.
Under this program a property’s assessed value is frozen for a period of 10 years. This allows the owner to restore or improve the condition of the property and not pay additional taxes on the resulting increase in the property’s value until the ten-year benefit period has expired.
Realtors and buyers need to be aware that the program has been reduced to ten years and verify how many years remain on the specific property’s benefit. Under normal circumstances, a permitted remodel will trigger a reassessment of the home and therefore higher property taxes. With the Special Assessment in place, property taxes will not rise based on assessed value (bonds and levies still effect specially assessed property). This means that the maximum value of the program is only realized if the property is specially assessed before the remodel/rehabilitation project is undertaken. We’ve gone through the process with two properties.
Both commercial and residential properties on the program are eligible to apply for one renewed period but local city governments can disallow the renewal option for residential property. On January 27, 2010 the Portland Historic Landmark Commission stated that they were thankful that Portland City Council had not taken any action to disallow renewals in their State of the City Preservation Report 2010.
This is a simple overview of a very complex program. A property that is administratively removed from the program could owe the taxes saved and a penalty.