Axing taxes for historic homes
The 120 years of wear and tear on the downtown Truckee home of Tanya Africa and David Kean could mean $100,000 in restoration costs for the new homeowners over the next several years. The couple has ambitious plans to restore their historic High Street home, and they are excited that a new town action could lend financial assistance to their cause. The 900-square-foot house sits on a beautiful yard above Commercial Row, but will require some improvements, like a foundation, framing and insulation – aspects of building that weren’t used in construction during the 1880s.But under a soon-to-be enacted ordinance, Africa and Kean will be able to use about $1,200 a year that would usually go to property taxes for restoring their home, which has been designated as the highest level of historic building in the town of Truckee.The program could mean more than $12,000 for property improvements during the 10-year life of the program’s commitment. For other properties, the program could offer up to $30,000 over 10 years, according to the Truckee planning department.
The town ordinance, which is scheduled be adopted on Sept. 2, will enact the Mills Act, a state property tax reimbursement program for historic property owners. Truckee will be the first municipality in Nevada County to implement the act.For historic property owners, the act is a chance to embark on projects that may have been sidelined by a shortage of funding. For Truckee, the act will help enhance the community’s historic core, a valuable cultural and economic asset to the town, planning officials said.”What the Mills Act would allow us to do is contribute to the beautification of downtown,” said Africa, associate director of the Truckee Donner Land Trust. “These historic structures are a key part of the character of our community.”Africa and Kean, who bought the house in February, have already invested between $6,000 and $10,000 in framing and insulating their bedroom, and taking out false ceilings that were installed in the 1970s.
Africa calls the work a “labor of love,” and while the effort may increase their property values, working on a historic building can be much more time consuming and expensive than a standard remodel or addition.”Every improvement you do leads to five more,” said Africa, who noted that a simple project can uncover “surprises” that are unique to historic structures.To get the tax savings, a property owner must sign a ten-year commitment to the program and pledge to use the money for improvements to the property. The building must be a recognized historic structure and owners will be charged a $500 one-time application fee and a $75 yearly renewal fee to enter the program.For Africa and Kean, these guidelines are not a deterrent to entering the program. They plan to be at their home for longer than ten years, and the cost, Africa said, is minimal compared with the benefits of thousands of dollars in property tax reduction.
Residential properties, which have low profit potential, are the structures that will benefit the most from the program. Historic commercial buildings that generate high profits are not likely to benefit from the program, according to the Truckee planning department.The act is part of Truckee’s overarching historic preservation effort that garnered statewide recognition this year by being picked for a California Governor’s Historic Preservation Award. The award recognizes a program that has categorized the town’s historic structures, provided design guidelines for the buildings, and now is creating financial incentives for historic preservation. “The governor’s award … says this is sort of a unique approach to historic preservation and the citizens of Truckee should be proud,” said Town Planner Duane Hall. “…[The award] is saying that within the cities and counties we are in the front pack.”If you are a historic property owner interested in the Mills Act property tax reduction, call Town Planner Duane Hall or Associate Planner Heidi Burns at 582-7820.