A Dallas property tax break meant to keep old buildings standing has been used on 306 properties in the 33 years since the city created it, and council members get a detailed look at the program Monday afternoon.
Planning and Development staff, led by Assistant Director Arturo Del Castillo, are scheduled to brief the City Council's Economic Development Committee on the Historic Preservation Tax Exemption Program at its 1 p.m. meeting. The presentation opens with the question the committee is being asked to weigh: is the exemption a tax expenditure or an economic development investment?
How it works
The council created the program by ordinance in 1993 and amended it in 1998, 2001, 2004, 2007 and 2015, extending its sunset date in 2020 and again in 2025. A building qualifies if it is an individually designated landmark or a contributing structure in a city historic district.
Owners commit to a rehabilitation first and get the break only after the work is finished and verified. The exemption covers city property taxes alone; school district and county taxes are still owed. The size of the break depends on where the building is and how much the owner spends relative to its pre-renovation value:
- In urban historic districts, spending more than 50% exempts the added value for 10 years, and spending more than 75% exempts the full value for 10 years.
- In districts the city classifies as endangered or revitalizing, spending more than 25% exempts the full value for 10 years.
- A citywide maintenance option exempts added value for three years when spending reaches at least 3%.
The Landmark Commission decides eligibility. When the projected city tax forgone on a project tops $50,000, the council reviews the amount above that line and can deny it, though the owner still keeps up to $50,000. According to the briefing, 296 of the 306 projects stayed at or under that threshold and 10 went over it. Fifty-two exemptions are active today.
Owners must sign a commitment to repay all forgiven taxes if the historic property is destroyed or significantly altered in violation of the district rules through their own act or negligence, and staff audit invoices, permits and completed work.
