Valuation of Historically Significant Real Property
The Nebraska Department of Revenue issued guidance in June on the property tax “preference” available for qualifying historic property in the Valuation Incentive Program (“VIP”). The preference is a temporary hold on increases in tax valuations that result from rehabilitating historic property. The hold lasts for eight years. After the eight-year period, the valuation gradually increases over the next four years to match actual value.
The preference is generally available to properties listed in the National Register of Historic Places, properties designated as historically significant under a local landmark ordinance, or located within a district listed in the National Register of Historic Places or within a district designated pursuant to a local landmark ordinance and determined to be historically significant by the State Historic Preservation Officer. The historic property must also be subject to property tax.
To qualify for the preference, an owner of historic property must file an application with the State Historic Preservation Officer prior to commencing work. The owner must also obtain a written certification from the county assessor stating the last assessed value of the property.
This program complements the Nebraska Job Creation and Mainstreet Revitalization Act, which provides tax credits for the rehabilitation of historically significant property. Those credits offset Nebraska income tax, the premium tax on insurance companies, or the franchise tax on financial institutions. In contrast, VIP temporarily dampens the property tax impact to the property owner from improving historically significant real property. The Nebraska Department of Revenue also recently published guidance on the transfer of both Type A and B historic tax credits via a web application.
Please contact us if you have questions about either of these programs. Thank you.