The Temporary Historic Property Tax Exemption provides a local property tax incentive for the sensitive, "substantial rehabilitation" of historic buildings. While all counties are required to offer this exemption, not all counties have set priorities for the program.
Properties must be listed on or eligible for listing on the National Register of Historic Places, contributing to National Register Historic Districts or local historic districts, or designated by a county or municipal landmark ordinance. Contact Elizabeth (Beth) Foster Hill, Tax Incentive Programs Manager/National Register Coordinator, at (515) 281-4137 or Beth.Foster@iowa.gov to find out your building’s National Register status or for information about how to nominate a property to the National Register of Historic Places.
The property must also be eligible based on the specific county's priority list for that tax year. The County Board of Supervisors will establish priorities for which an exemption may be granted and will annually designate real property in the county for a historic property tax exemption. A public meeting must be held, with notice given, at which the proposed priority list will be presented.
By November 1 of the year in which the rehabilitation work takes place, a three-part substantial rehabilitation application must be submitted to the State Historic Preservation Office (SHPO) at the State Historical Society of Iowa. Part 1 of the application evaluates the significance of the property; Part 2 focuses on the proposed rehabilitation work to be undertaken; Part 3 is a request for certification that the rehabilitation work has been completed in accordance with The Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings and that the expenditure meets a "substantial rehabilitation" test. It is best to submit Parts 1 and 2 of the application before the project begins so that approval from the State Historical Society can be given. Part 3 must be submitted after the rehabilitation work is complete.
There is a minimum amount of rehabilitation investment needed to be eligible for this program. A "substantial rehabilitation test" is required. Before completing the three forms it is advisable to estimate the adjusted basis and the total rehabilitation investment for the project to determine whether it will likely meet the "substantial rehabilitation" test. There are two separate applications of the test—one for income-producing and one for non-income producing properties.
The program provides a combination of four years full exemption from any increased valuation due to the rehabilitation, followed by four years of property tax increases (25% per year) up to the new valuation. The actual assessor’s exemption application with the SHPO’s approved application attached must be made to the appropriate county assessor no later than February 1 of the assessment year. Note that you must fill out two applications for this program. Application to receive SHPO approval for the completed work must be made by November 1 of the year that the work was completed in order for SHPO to review and approve the application in time for it to accompany the county assessor’s application by February 1.
Elizabeth (Beth) Foster Hill
Tax Incentive Programs Manager/National Register Coordinator
Department of Cultural Affairs
600 E. Locust Street
Des Moines, IA 50319-0290