Work that is classified as major must be reviewed by the Historic Preservation Commission. These projects involve a change in the appearance of a structure or site; are substantial in nature; and include new construction, expansion of a building footprint, and significant changes in landscape features. After approval by the Commission, staff issues a COA, and work may commence. A legal ad must be run fifteen days prior to the Commission meeting.
Local Property Tax Abatement
The City offers a tax abatement as an economic incentive for the rehabilitation of existing structures located within Local Historic Districts. The same financial opportunity is also available for the rehabilitation of individually listed City landmarks. The ad valorem tax exemption exempts property owners from paying City ad valorem taxes on the increased value of rehabilitated property.
For example an existing structure appraised for tax purposes at $60,000 that increases in tax appraised value to $90,000 would be taxed at the pre-rehabilitation assessed value of $60,000 for a period not to exceed seven (7) years upon formal approval by City Council. Local Tax Abatement Forms are available on line or in the Land Development Office.
State Incentives
Mississippi Senate Bill 3067 passed in March of 2006, provides for a state income tax credit equal to 25% of the qualified expenses of rehabilitating historic structures used for residential or business purposes. Properties do not need to be income-producing to qualify for the state tax credit and only expenditures incurred after January 1, 2006 qualify.
Properties eligible to receive the credits are those which are:
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individually listed in the National Register of Historic Places
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contributing to the significance of a National Register historic district
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designated as Mississippi Landmarks.
Eligible projects must meet the following criteria:
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Qualified rehabilitation expenditures must exceed: (a) $5,000 in the case of owner-occupied dwellings, or (b) 50% of the total basis in the property for non-owner-occupied dwellings.
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All work must meet the Secretary of Interior's Standards for Rehabilitation.
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Only rehabilitation expenditures incurred after January 1, 2006, qualify.
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Not-for-profit entities are ineligible to receive the credits.
To qualify for the state tax credit, property owners must submit a three-part State Historic Preservation Certification Application, along with photographs, to the Mississippi Department of Archives and History. For properties that also qualify for the federal credits, the property owner must only submit the federal certification application, along with the one-page form "Statement of Intent: Mississippi State Historic Preservation Tax Credit."
It is recommended that the application be submitted for review and approval BEFORE starting work so that potential problems in the compliance with the standards, which might jeopardize the tax credit, can be avoided.
Federal Income Tax Credits
Substantial certified rehabilitation of a certified historic structure that is to be used for commercial, industrial, agricultural, or rental residential purposes may quality for a 20% federal income tax credit. The 20% rehabilitation tax credit equals 20% of the amount spent on the rehabilitation. To qualify, a building must be listed in the National Register of Historic Places or must be certified as a historic component of a National Register Historic District.
A 10% rehabilitation tax credit is available for the rehabilitation of non-historic buildings built before 1936. As with the 20% tax credit, the rehabilitation must be substantial, exceeding either $5,000 or the adjusted basis of the property, whichever is greater. The property must be depreciable and the credit applies only to buildings rehabilitated for non-residential uses. Both federal tax credits are administered by the Mississippi Department of Archives and History.
