"Historical" Tax Exemption....why?? (Austin, Clarksville: real estate, credit, houses)

[mimimomx3]

I'm not sure if it's widely known, but owners of what the city has deemed a "historic" property are exempt from nearly all city taxes (I think they pay 25% of AISD taxes). This really doesn't seem fair. If someone wanst to buy a historic property, that should be incentive enough. When the regular, old Austin homeowner is being taxed to death, these folks (whose historic homes are inevitably in the central, high value part of Austin) are getting a pass. Thoughts?

[Trainwreck20]

Probably because they are not allowed to upgrade or modify the property, or something along those lines. The property IS essentially worthless to most people.....

[mimimomx3]

Unless you buy one that is already remodeled....we aren't talking about slums here, they are million dollar houses.

[atxcio]

It's pretty crummy. In fact, the AISD got rid of the exemption (although it still applies to the other city taxes) in 2009 but just reinstated it this summer after pressure from some homeowners.

AISD Gives Historic Home Exemptions Back - For Now... | AustinPost.org

The homeowners claim the exemptions are needed so some East Austin residents can stay in their homes, even as the property values are rising. That would be OK with me, but it sure seems like the people taking advantage of this are folks living in expensive, central Austin neighborhoods.

Should be an easy fix, but one will ever agree to it - make the exemption available on up to 250k or so appraised value. That should take care of the long-time East Austin residents.. Or at least most of their property value. But the people taking this exemption on $1m west Austin mansions just seems ridiculous. If they can afford such a house, they should be able to pay the property taxes on the assessed value just like everyone else.

[verybadgnome]

There is a difference between an incentive like a tax deduction which is maybe 20 cents on the dollar and a wholesale giveaway. This exemption is definitely the latter as the city "loses" money to each of these homeowners and the rest of us who don't get it have to subsidize city services for these "preservationists."

A good question is why are we the only ones who do this in this state?

"Austin is the only large Texas city that offers permanent tax breaks to hundreds of historical homes and buildings, according to an American-Statesman review of preservation programs in the state."

Austin tax breaks for historical landmarks more generous than other cities, review finds

Do people forget that there is a type of buyer out there who would buy an old house and restore it period-correct without incentives b/c they appreciate classic architecture and design? That throwing money at them for something they would have done anyway is just a waste? Do Austinites believe we have to preserve every single home that is X years or greater?

Good commentary here:

Austin Contrarian: Tinkering isn't good enough

"The average Austinite does not believe that preserving a mansion once owned by the the proprietor of Austin's first cash-only building materials business is worth the loss of $34,772 in annual tax revenue for the city, county and school district."

[verybadgnome]

Originally Posted by mimimomx3

Unless you buy one that is already remodeled....we aren't talking about slums here, they are million dollar houses.

Exactly. Maybe not a million but a 2,349 sq. ft., $629k home (asking price) home in East Austin is not exactly a bad investment for the guy who bought the property for probably less than $150k:

Historic East Austin home remodeled for modern living

[mimimomx3]

Here's one listed for $995K, historical exemption on the $19K in yearly property taxes. Located right dab in central Austin, and not what I would call "essentially worthless"....pretty nice inside!
Moderator cut: real estate link not from realtor.com or Austin BOR site

[centralaustinite]

Yes, a better approach is the creation of a "historic district" this can protect historic homes within it (to prevent the wholesale scraping and removal of central city housing stock where most of the value is in the land) but which doesn't come with tax breaks. I believe this is how most cities do it.

Because Austin used to be so small and because our historic properties tend to be scattered rather than clustered we didn't take this approach. Some neighborhoods (Fairview in Travis Heights, and parts of Clarksville and Hyde Park) are moving towards creating historic districts.

If you are interested in this issue, you should follow City Council meetings and City Council elections. It is a recurrent topic. Over the last five years, there have been a lot of changes as wealthy West Austinites sought the exemptions (and folks started businesses to help them) strictly as a tax reduction measure. Suddenly the historic commission was getting hit with dozens and dozens of new requests. To their credit, they started clamping down but I don't think there is any process in place to strip the designation from homes that may have gotten it by stretching some definitions and hiring personal lobbyists to see that it got done.

[Austin97]

Originally Posted by mimimomx3

I'm not sure if it's widely known, but owners of what the city has deemed a "historic" property are exempt from nearly all city taxes (I think they pay 25% of AISD taxes). This really doesn't seem fair. If someone wanst to buy a historic property, that should be incentive enough. When the regular, old Austin homeowner is being taxed to death, these folks (whose historic homes are inevitably in the central, high value part of Austin) are getting a pass. Thoughts?

the issue now is that they have given the tax exemption and houses have been bought and sold on the premise that the exemption exists. This raises the property value. Is it really fair for the city to strike it and literally cause a 30% drop in price? (3%/year over ten years added to the price would not be unusual for an annuity).

If they are going to drop it, they should phase it out over 10 years so the price can adjust slowly.

[TexasHorseLady]

There may be some houses that don't really deserve it, but I'd rather see that than the decimation of our history and those things that make Austin what it is to make way for new "you can find it in Anywhere, USA" construction.

Progress is all well and good, but some things need to be protected from progress, because it can run amuck if left to its own devices, to the detriment of the community at large.