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Travis County caps tax exemptions for historic properties

Wednesday, July 11, 2012 by Elizabeth Pagano

The Travis County Commissioners Court has revamped its rules on tax exemptions for historic properties, following the City of Austin’s lead and instituting a cap on the amount the owner of a historic home might save.


The Commissioners Court voted unanimously Tuesday to adopt the ordinance passed by the Austin City Council last December, which grandfathers properties designated as historic before 2004 that have not changed owners, and puts a hard cap of $2,500 on tax exemptions for historic homes designated or purchased after Jan. 1, 2012. Properties that gained exemptions between 2004 and 2012 will also mirror city standards for that time. Homeowners of historic homes saw a gradual decrease in exemptions over that time period.


The Commissioners Court also overhauled its policy on homestead exemptions for those homeowners who are disabled or over 65 years old. The commissioners voted unanimously to change their exemption from $65,000 to $70,000. The increase will cost the county just more than $1 million, $116,000 of which will come from the savings gained by the new historical exemption cap.


“It’s a million dollar hit, and we’ll just find a way to fund it,” said County Judge Sam Biscoe.


This is the first change since 1994 in the exemption for Travis County homeowners who are over 65 and/or disabled.


“I think we need to send a clear message to the other taxing jurisdictions to let them know that Travis County means business when it comes to providing tax relief to our over 65 and disabled homestead property owners,” said Commissioner Ron Davis.


Budget Director Leroy Nellis told In Fact Daily that previous property tax exemptions for owners of area historic homes, which had no cap and was added to the 20 percent homestead exemption, meant 102 out of 226 owners of historic homes paid no Travis County taxes.


Several of those homeowners who will likely be impacted by the new policy spoke against the changes at the public hearing.


James Strickland, one of the historic homeowners who likely would pay higher taxes, predicted dire consequences for those who value historic homes not only because of higher taxes but because owners are restricted in redeveloping properties designated as historic.


“I share the concern that many of the other homeowners have and I’ll tell you right now that you are going to have very, very few people very interested in preserving the history of Austin. … What we’re facing is not just the loss of exemption, but our developmental rights. That’s a substantial amount that we’re giving back to the community,” Strickland said.


“A number of us are going to be quite interested in trying to figure out how we rescind the deal because the rules have changed,” he said.


Strickland noted that normal development rights on his one-acre property near Red River Street and 47th Street would “significantly overshadow” the capped tax breaks.


Other homeowners echoed this threat, though the city’s Historic Preservation Officer Steve Sadowsky said that his office had not seen any requests to reverse historic zoning since the city passed its reforms. Sadowsky explained that his office was moving away from focusing on individual designations of historic properties and towards districts.


In adopting the city’s existing ordinance, the county will adopt historic landmark and historic district designation criteria, permits and certificates of appropriateness, and inspections that have been established by the city in addition to the exemption caps.


The new policy will be reviewed by the county annually until commissioners understand “the full effect, and tweak it as much as we need to,” explained Biscoe.


“We do this really after about three years of study. It’s a kind of complicated matter and this is not perfect, but it’s probably a move in the right direction at this point,” said Biscoe.

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