What is a Tax Credit?
A tax credit is an amount of money that taxpayers can subtract from taxes owed to their government. Unlike deductions and exemptions, which reduce the amount of taxable income, tax credits reduce the actual amount of tax owed. The value of a tax credit depends on the nature of the credit; certain types of tax credits are granted to individuals or businesses in specific locations, classifications, or industries.
What is a Tax Abatement?
Tax Abatement freezes the tax assessment in improvements to property at the pre-development level. To be eligible for tax abatement, a significant investment must be made in the property, generally either new construction on vacant land or gut rehabilitation of an existing building.
Application must be made before construction begins.
The usual term for tax abatement is 5 to 10 years.
St. Louis Recommended Abatement for Residential Projects < $1 Million
Historic Tax Credit
The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings.
20% Tax Credit
Available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park
Service, to be “certified historic structures.”
Rehabilitation work must comply with the Secretary’s Standards for Rehabilitation.
Owner-occupied residential properties do not qualify for the federal rehabilitation tax credit.
For an aerial view of certified historic structures, see the figure to the right.
10% Tax Credit
Available for the rehabilitation of non-historic buildings placed in service before 1936.
The building must be rehabilitated for non-residential use.
At least 50% of the existing external walls must remain in place as external walls,
At least 75% of the existing external walls must remain in place as either external or internal walls.
At least 75% of the internal structural framework must remain in place.
Kingsway District Abatement via Park Place Recommendation
The Kingsway District Standards outline requirements based on types of improvements for projects with total costs below $1,000,000. If project is in excess of $1,000,000, additional requirements are expected for abatement as part of developer’s plan:
- Sidewalks: Must be improved to ADA accessibility. If project costs more than $1,000,000, redeveloper must finance the improvements.
- Trees: Trees should be provided in existing tree wells. City may require developer to add trees if project costs more than $1,000,000.
- Curbs: Trees should be provided in existing tree wells. City may require developer to add trees if project costs more than $1,000,000.
- Streetlights: Should be provided when 12 - 14’ poles are not present approximately 25 - 30’ apart. If project costs more than $1,000,000, redeveloper must finance the improvements.
- Utilities: Sewer, electrical, water, and gas should be improved to standard. If project costs more than $1,000,000, redeveloper must finance the improvements.
For additional questions, help, or to get involved, you can contact the Park Place HED Development Committee at Development@ParkPlacehed.org