The Heritage Tax Exemption Ordinance was established in 1984 to provide tax relief to owners of designated heritage properties, which can then be reinvested into maintenance and long-term preservation of historic structures. To receive a heritage tax exemption, properties are subject to an annual inspection, must make repairs as needed based upon inspection results, and must meet all other eligibility requirements stipulated in the Heritage Tax Exemption Ordinance. If approved, the property owner may receive an exemption ranging from 38% to 100% of the improvement value (excludes property value). The amount is based on use of the property and whether it is designated as a Heritage Landmark or is part of a Heritage District. Collin College and the Plano Independent School District also provide an equivalent tax exemption, if approved by the City of Plano. More information about the program can be found at historicplano.org.
2023 Inspection Results
On January 3, 2023, city staff inspected 87 properties for compliance with the heritage tax exemption program eligibility requirements, including that all “Poor”-rated items identified in a previous inspection report had been completed. Last year’s inspection reports identified 30 “Poor”-rated issues among 19 different properties that had until January 1, 2023, to be completed. Following this year’s inspections, there were eight remaining “Poor”-rated issues among four different properties.
|
|
2022 Inspection Reports
(March 2022)
|
2023 Inspection Results
(January 2023)
|
|
Number of “Poor”-rated Issue(s)
|
30
|
8
|
|
Properties with “Poor”-rated Issue(s)
|
19
|
4
|
The inspections also identified one property with exterior alterations constructed without approval of a Certificate of Appropriateness. As a result of these inspections, a total of five properties were deemed ineligible by staff and notified on January 6, 2023, of their right to appeal or request an extension from the Heritage Commission.
Heritage Commission Appeals, Extensions, and Waivers
The Heritage Commission considered appeals and extension requests related to heritage tax exemptions at its January meeting each year (postponed to February 7th this year due to inclement weather). The recent amendments to the Heritage Tax Exemption Ordinance include opportunity for the Commission to grant a one-year waiver from certain eligibility requirements. If granted a waiver, property owners can be granted half of their eligible tax exemption rate (i.e., if a property was eligible for a 75% tax exemption, they could receive a 38% tax exemption with approval of a waiver).
On February 7, 2023, the Heritage Commission considered appeals/extension requests for four of the five properties deemed ineligible by staff. The fifth property, located at 812 18th Street, chose not to appeal to the Heritage Commission.
1. 901 17th Street – Several “Poor”-rated issues had not been addressed, including torn window screens and damaged window trim. At the meeting, the property owner presented evidence that the window screens had since been removed and repair work on the window trim was ongoing. The Commission granted an extension, allowing the property owner to address the outstanding repairs by January 1, 2024. With approval of the extension, the property is now eligible for a 2023 Heritage Tax Exemption.
2. 907 17th Street – The property was found to have construction of an exterior addition on the side of the house without the required Certificate of Appropriateness. At the meeting, the property owner explained the addition was necessary to mitigate drainage issues, that she was not aware the addition needed approval, and expressed her willingness to bring it into compliance. The Commission granted the appeal, allowing the property owner to bring the addition into compliance by January 1, 2024. With approval of the appeal, the property is eligible for a 2023 Heritage Tax Exemption.
3. 910 18th Street – Several outstanding “Poor”-rated issues, originally dating back to 2019, that had not been addressed. The previous owner was denied a tax exemption for 2020 after failing to make the repairs, was reinstated in the program for 2021 after attempting the repairs (although done without approval and in a manner inconsistent with the district’s design standards), and received a Certificate of Appropriateness (CA) and an extension to rectify the repairs by January 1, 2023.
The property was sold to a new owner in late 2021, who received the benefit of the extension and received a tax exemption for 2022. The new owner’s plans for property include more extensive renovations, for which several CA were approved by the Commission in January-March 2022. More information about these outstanding issues is provided in the supporting documents.
At the meeting, the property owner’s representative explained that the planned renovations were ongoing and requested another extension. Due to the past history of the property, the Commission granted a one-year waiver (in lieu of an extension) to allow the new property owner to receive a partial tax exemption and complete all outstanding repairs by January 1, 2024. With approval of the waiver, the property is eligible for a 2023 Heritage Tax Exemption at 50% of their maximum eligible rate. This equals to a 19% tax exemption, which is half of the maximum eligible rate of 38%.
4. 920 18th Street – A “Poor”-rated issue, a broken second-floor gutter, had not been addressed. The property owner was unable to attend the meeting, but presented evidence via e-mail that the gutter had since been repaired. The Commission granted an extension to address the outstanding repair until January 1, 2024. With approval of the extension, the property is deemed eligible for a 2023 Heritage Tax Exemption.
Details of ineligibility issues and reasoning for the appeal/extension requests are included in the staff reports from the Heritage Commission meeting in the supporting documents. As a result of these approvals, a total of 86 heritage properties are recommended for approval of a 2023 heritage tax exemption.
Next Steps
If approved, the list of 86 properties recommended for approval in the draft ordinance will be provided to the Collin County Central Appraisal District. 2023 Inspection Reports, including any newly identified “Poor”-rated repairs to be completed by the end of this year, will be provided to all participating property owners by no later than March 31, 2023. Property owners will then have the option to appeal these issues to the Commission in May.
Summary
A total of 86 properties are recommended for approval of heritage tax exemptions as listed in Exhibit A of the attached Ordinance. This exhibit lists information such as the exemption percentage applied, property improvement values, and estimated tax exemption values for each taxing entity. Based on current property values and tax rates, this equates to an estimated exemption of $67,608 in city taxes and a total estimated exemption of $284,706 among the three participating tax entities: City of Plano, Plano Independent School District, and Collin College (Collin County operates their own tax abatement program for historical properties). The actual value of the tax exemptions will be finalized after the taxing entities set their tax rates and after the values of the properties have been determined by the Collin Central Appraisal District (which includes other applicable property exemptions related to Homestead, Over 65, etc.).