§ 35-618. Tax Exemption Qualifications.

(a)

Assessed Valuation. In accordance with the provisions of this article, a building, site, or structure which meets the definition of a historically significant site in need of tax relief to encourage preservation and which is substantially rehabilitated and/or restored as certified by the historic and design review commission and approved by the city tax assessor-collector, shall have an assessed value for ad valorem taxation as follows regardless of ownership during the granted time period:

(1)

A residential property shall have the assessed value for ad valorem taxation for a period of ten (10) tax years equal to the assessed value prior to preservation.

(2)

A commercial property shall have no assessed value for ad valorem taxation for a period of five (5) tax years after verification. Thereafter, the exempt property shall be reappraised at current market value and assessed at a fifty (50) percent rate for an additional consecutive five-year period.

(3)

A commercial property converted to a residential property shall have the assessed value for ad valorem taxation for a period of ten (10) tax years equal to the assessed value prior to preservation.

(b)

Applicability. This exemption shall begin on the first day of the first tax year after verification of completion of the preservation required for certification; provided the building shall comply with the applicable zoning regulations for its use and location.

(c)

Application. Application for a historic structure preservation tax exemption pursuant to this division is to be filed with the office of historic preservation. The historic preservation officer shall be the agent of the city for the purposes of administering this division provided that the historic preservation officer request a recommendation from the historic and design review commission. Each application shall be signed and sworn to by the owner of the property and shall:

(1)

State the legal description of the property proposed for certification;

(2)

Include an affidavit by the owner describing the historic significance of the structure in need of tax relief;

(3)

Include a final complete set of plans for the historic structure's restoration or rehabilitation;

(4)

Include a statement of costs for the restoration or rehabilitation work;

(5)

Include a projection of the estimated construction, time and predicted completion date of the historic restoration or rehabilitation;

(6)

Authorize the members of the historic and design review commission, the city tax assessor-collector and city officials to visit and inspect the property proposed for certification and the records and books of the owners as necessary to certify that the property in question is in substantial need of restoration or rehabilitation;

(7)

Include a detailed statement of the proposed use for the property; and

(8)

Provide any additional information to the historic and design review commission which the owner deems relevant or useful such as the history of the structure or access to the structure by the public.

Each application shall contain sufficient documentation confirming or supporting the information submitted therein.

(d)

Certification.

(1)

Historic and Design Review Commission Certification. Upon receipt of the owner's sworn application the historic and design review commission shall make an investigation of the property and shall certify the facts to the city tax assessor-collector within thirty (30) days along with the historic and design review commission's documentation for recommendation of either approval or disapproval of the application for exemption.

(2)

Tax Assessor-Collector Approval. Upon receipt of the certified application for tax exemption as well as the recommendation of the historic and design review commission, the city's tax assessor-collector shall within thirty (30) days approve or disapprove eligibility of the property for tax relief pursuant to this division. In determining eligibility, the tax assessor-collector shall first determine that all the requirements of this division have been complied with and that only the historic structure and the land reasonably necessary for access and use thereof is to be provided favorable tax relief.

(e)

Verification of Completion. Upon completion of the restoration and rehabilitation, together with a fee as specified in Appendix "C" of this chapter, the owner, who may not be the same as at the time of application, shall submit a sworn statement of completion acknowledging that the historically significant site in need of tax relief to encourage preservation has been substantially rehabilitated or restored as certified by the historic and design review commission. The historic and design review commission, upon receipt of the sworn statement of completion, but no later than thirty (30) days thereafter, shall make an investigation of the property and shall recommend either approval or disapproval of the fact that the property has been substantially completed as required for certification. If the historic and design review commission recommends that it has not been substantially completed as so required, then the certified applicant may be required by the historic preservation officer to complete the restoration or rehabilitation in order to secure the tax exemption provided herein. If the verification of completion is favorable, the historic and design review commission shall recommend approval and the historic preservation office may notify the tax assessor-collector in writing of compliance. Thereafter, the tax assessor-collector shall provide the property with the historic tax exemption.

(f)

Historic Preservation Tax Exemptions.

(1)

Historic Preservation Tax Exemption for Residences in Need of Substantial Repair. In accordance with the provisions of this chapter, a historically significant residential building, which meets both the definitions of a historically significant site in need of tax relief to encourage preservation and of a residential property in Appendix "A" of this chapter, and is either individually designated or is located within the boundaries of a locally designated historic district which is substantially rehabilitated and is approved by the chief appraiser of the Bexar County Appraisal District, shall have an assessed value for ad valorem taxation as follows:

A.

A residential property shall have no assessed value for ad valorem taxation for a period of five (5) tax years after verification, as defined in Appendix "A" to this chapter. Thereafter, the exempt property shall be reappraised at current market value and assessed at a fifty (50) percent rate for an additional consecutive five-year period.

B.

This exemption shall begin on the first day of the first tax year after verification of completion of the substantial rehabilitation by the historic and design review commission, provided compliance with subsection (b) of this section.

(2)

Historic Preservation Tax Exemption for New Historic Districts.

A.

Homeowners in New Historic Districts. For properties located within a historic district designated by the city council after October 1, 2000, all residential properties occupied by the property owner will qualify for an ad valorem tax credit amounting to twenty (20) percent of the assessed City of San Antonio ad valorem property tax. This tax exemption shall begin on the first day of the first tax year after designation of the historic district and will extend for a total of ten (10) tax years. This tax exemption does not apply to properties within a historic district designated by the city council prior to October 1, 2000 or to properties located within the San Antonio downtown business district.

B.

Long-Time Resident Extension. For owners of residential properties located within a local historic district designated by the city council after October 1, 2000 who can show proof of continuous permanent residence, as defined in this article, ten (10) tax years after designation, at a residence within the district for the period beginning on the day of official designation for the district through the same date ten (10) years later, the property owner will qualify for an additional five-year use of the property tax exemption that allows for a twenty (20) percent tax exemption. Therefore, the tax exemption will apply for a total of fifteen (15) tax years from the date of designation. If the property owner moves to a different residence during the life of the credit, even to one (1) located within the historic district, then the exemption is automatically terminated.

(3)

Historic Preservation Tax Exemption for Substantially Rehabilitated Rental Properties. Owners of a substantially rehabilitated designated historic landmark, either individually designated or by location within a local historic district, that lease forty (40) percent or greater of all rental units to low-income tenants, as defined by the United States Housing and Urban Development (HUD) requirements for the San Antonio Metropolitan Statistical Area, can qualify for an additional tax exemption. Gross annual rent for the affordable rental units cannot exceed thirty (30) percent of the corresponding HUD income limit established for the number of family members/tenants seeking to reside in a particular rental unit. The low-income parameters shall be verified/adjusted using the HUD standard on an annual basis.

A.

If the above criteria are fully observed then the property will qualify to receive tax relief in the form of zero assessed ad valorem taxes for the property for ten (10) years, effective on the first day of the year following verification of completion of the rehabilitation by the historic and design review commission, regardless of when the historic district in which the property is located was officially designated.

B.

The tax exemption will be terminated if the affordable rental rates are increased to exceed the specified rental limits for greater than sixty (60) percent of the number of rental units.

C.

However, the exemption can be reinstated the following year if the affordable requirements of this subsection are again met, upon which the exemption is then available for the balance of the original ten-year life of the exemption.

D.

This tax exemption shall be available only in the period defined in subsection (1) above, regardless of termination or reinstatement periods. Assessed taxes after the ten-year tax-free period will be based upon the appraised value for that current year.

(g)

Eligibility.

(1)

The tax exemption options outlined in subsection (f), above, will remain in effect unless terminated by designation status being removed pursuant to subsection 35-606(g) of this article.

(2)

An owner of a substantially rehabilitated historic residential property can choose between utilizing the three (3) tax exemptions outlined in subsections (a)(1), (f)(1), and (f)(3) (if after rehabilitation the property still qualifies as "residential" under the definition in Appendix "A" of this chapter) but can qualify for only one (1) of the three (3) rehabilitation tax exemptions for each substantial rehabilitation.

(3)

The tax exemption established in subsection (f)(2) of this section is still effective even if the property is receiving one (1) of the four (4) residential or commercial rehabilitation tax exemptions (subsections (a)(1), (a)(2), (f)(1), or (f)(3) of this section). Applicants may lose any tax exemptions granted in association with the property if any unauthorized demolitions, alterations, or relocation of the structure occurs without a proper certificate of appropriateness being issued beforehand, or if work fails to conform to the original scope of work submitted to the office of historic preservation and approved during the certification process.

(h)

Application. An application for historic preservation tax exemption options is established in subsection (f)(1) or (f)(4) of this section pursuant to subsection (c) of this section.

(Ord. No. 98697 § 6) (Ord. No. 2009-01-15-0001, § 2, 1-15-09) (Ord. No. 2010-06-24-0616, § 2, 6-24-10) (Ord. No. 2014-04-03-0206, § 6, 4-3-14)

This forty (40) percent requirement for affordable units is consistent with a federal tax incentive to promote the development of affordable housing. The HUD income limits for low-income tenants is a sliding scale, ranging from twenty-four thousand one hundred fifty dollars ($24,150.00) for one (1) person to forty-five thousand five hundred dollars ($45,500.00) for eight (8) people. Therefore, thirty (30) percent of the appropriate income limits amount is the allowed annual gross rent.