Houston Skyline

Historic Site Tax Exemptions

Thank you for your interest in preserving Houston’s history. We protect the past with the help of individuals like yourself, individuals who safekeep architectural treasures that dot our city. The city assists these efforts by reimbursing property taxes from certified historic renovations.

Website Historic Sites

How does this work?

First, city council must designate your building as historic. Your building is then placed into one of several historic categories: City of Houston Landmark, Protected Landmark, or a building that “Contributes” to an established historic district.

Next, the Houston Archaeological and Historic Commission (HAHC) approves your plans to revive the outside of your building, issuing a certificate of appropriateness (COA). A COA is unnecessary for internal improvements.

Finally, you’ll apply for a historic site tax exemption from economic development.

A Brief Summary

1. City Council Designates your building as historic

2. Houston Archeological and Historic Commission approves your external  improvements (if necessary)

3. You apply for a historic site tax exemption through the Economic Development Division

What Historic Improvements are Tax Exempt?

The renovation and preservation money you spend must equal at least 50% of the taxable value of the historic building; For information on the taxable value of your house click here.

The building costs  that qualify for this exemption include:

structuralwork,roofing,foundation, windows, sheetrocking, carpentry, electrical, plumbing, mechanical, flooring, fixtures such as sinks, bathtubs, toilets and interior work that becomes part of the building.

How does the City calculate historic tax exemptions?

1. If your renovation & preservation costs are between  50% and 100% of your building’s tax appraised value then the exemption equals the total amount you spent.

2. If your renovation & preservation costs are 100% or more of your building’s appraised value, then your exemption equals the appraised value of your building plus any added value HCAD places on your building after the first taxable year after your improvement.

See the tables below for an example:

Example: A historic residential home assessed by the Harris County Appraisal District (HCAD)

 

Taxable Category

Base Year Value

Improvement value (Building Value)

$80,000

Land Value

$150,000

Total Assessed property values per HCAD

$230,000

In this example the Restoration and Preservation must at least equal $40,000 (50% of the improvement value from the above table)

Restoration Expense

% of Improvement Value

City Tax Exemption

$40,000

50%

$40,000

$60,000

75%

$60,000

$80,000

100%

$80,000*

$100,000

125%

$100,000*

 

* Plus any added value HCAD puts on historic building the first taxable year after completion.

Note: If the assessment value by HCAD of the improvement goes up after the first taxable year after completion of work, owner is responsible for paying city taxes on the difference.

Annual Review

The exemption shall automatically continue as of January 1st of each year succeeding the year the exemption was first granted for the duration of the 10 or 15-year period. However, the Economic Development Department Director shall conduct an annual review of each property granted an exemption, and if they find (1) taxes assessed on the property are delinquent, (2) the historic site has deteriorated, has been demolished or destroyed, or (3) has been the subject of a Certificate of Appropriateness issued pursuant to sections 33-247 or 33-250, then the changed conditions shall constitute grounds for revocation of the Exemption.

Duration and Details of Exemption

The Exemption will last 15 years if the project receives no financial incentive from municipal hotel occupancy taxes;it will last 10 years otherwise. The Exemption amount will not exceed the initial amount during the historic site exemption.

The Exemption will begin on January 1st after the date the Director of Economic Development makes the determination the owner has met all the requirements of the Ordinance.

If sufficient restoration work has not been completed to satisfy the percentage of tax exemption within 5 years of the passage of an historic site tax exemption ordinance then the exemption ordinance will expire.

The applicant must re-apply for the exemption each year before April 30th with the Harris County Appraisal District. (HCAD Form 11.24)

An Alternative Exemption: “Significant” Historic Buildings

The City provides another tax exemption for “significant” historic buildings. To qualify, the building must:

  • Be designated as a City of Houston Protected Landmark;

  • Be at least 50 years of age;

  • Have more than four units if residential and originally built and used for non-residential purposes;

  • Be individually listed in the National Register of Historic Places or designated as a Recorded Texas Historical Landmark or be references as having historical significance in an authoritative survey conducted by a non-profit or governmental agency; and

  • Obtain 75% approval of the members of the HAHC present at a regularly scheduled meeting.

The significant historic buildings may be exempted from City of Houston ad valorem taxes for both improvements and land, up to $30,000 per year in perpetuity.

Next Steps

Historic preservation forms can be found at the following website: www.houstontx.gov/planning/Forms/forms.html

For a brochure explaing this process visit Planning and Development

For more information regarding the tax exemption please contact Ketan Inamdar at 832.393.0843 or by e-mail at ketan.inamdar@houstontx.gov

For more information regarding historic designation, please                               e-mail: historicpreservation@houstontx.gov or call 713.837.7963 to make an appointment for assistance with planning your project.  

Further details on this program can be found in the City's Code of Ordinances, Chapter 33, at www.houstontx.gov/codes.

Applications for historic designations and Certificates of Appropriateness are also available at the Planning & Development Department, 6th floor, 611 Walker Building.

After the site is designated "historic" by City Council, each owner desiring the tax exemption must complete a sworn application (.pdf) to the City's Director of Economic Development Department.

 

Maps:

Historic Districts

Historic Sites

 

For more information please contact Ketan.Inamdar@houstontx.gov