Owners of historic properties may be eligible for state and federal tax credits, as well as development incentives. Arlington’s local historic districts also receive certain zoning protections.
Protection for Local Historic Districts
Arlington’s Local Historic Districts are designated by the County Board and can include individual or collections of historic buildings, garden apartments, districts, cemeteries and natural formations per section 11.3 and section 15.8 of the County Zoning Ordinance. In collaboration with property owners and the Historical Affairs and Landmark Review Board (HALRB), Historic Preservation staff research and complete the local designation nomination forms to apply for listing as an Arlington Local Historic District.
Unlike nationally recognized historic sites, local designation provides certain protections for property owners. Properties designated as Arlington Historic Districts are entitled to design review assistance and are required to obtain special approval through the Certificate of Appropriateness (CoA) process for any exterior changes, new construction or demolition. This helps to maintain the architectural and historic integrity of individual buildings and larger neighborhood districts.
Historic Preservation Incentives
Owners of historic properties may also consider the following incentives:
- Preservation Easements: Easements are legal agreements attached to the deed of a property that are binding to current and future owners. Property owners enter into these agreements voluntarily with a qualified non-profit organization or government entity for two main reasons: tax benefits and protecting a historic property into the future. The donation of an easement to preserve a certified historic structure or historically important land area qualifies as a charitable contribution for federal income and estate tax purposes.
- Transfer of Development Rights (TDRs): allows two property owners to transfer density and other development rights from one parcel or site plan to another when the project preserves historic buildings, affordable housing, open space, community facilities or community recreation. The Clarendon Sector Plan, Fort Myer Heights North Plan and the Columbia Pike Form Based Codes include a density incentive for historic preservation. The County has identified possible donating sites in each area and the formula for square footage transfer, but it has not established criteria for what is expected of the donating site once TDRs are agreed upon. The Historic Preservation Program recommends that donating sites maintain and preserve their historic elements/facade/building envelope.
Rehabilitation Tax Credits
Property owners who rehabilitate historic properties may be eligible for state or federal tax credits during the year a project is completed. Owners must apply for these credits before they start work by contacting the Virginia State Historic Preservation Office. Thorough pre-construction documentation is required, including photos and written descriptions of the planned work.
Only work on the historic building, not new construction or additions, qualifies for tax credits. Examples of eligible expenses include:
- Electric, plumbing and mechanical updates;
- Architectural and engineering fees;
- Permit fees;
- Construction costs for painting, refinishing floors, reroofing, etc.;
- New bathroom fixtures.
The following tax credits are available:
- Federal Tax Credit Program: available to property owners who have rehabilitated their historic building. It allows property owners to claim 20% of rehabilitation expenses for income-producing properties that are certified historic buildings. A certified historic building is one that is listed in the National Register of Historic Places either as an individual building or as a contributing building in a historic district. Rehabilitation work must comply with the Secretary of the Interior’s Standards for Rehabilitation.
- Virginia Tax Credit: available for both owner-occupied and income-producing properties. Owners may claim 25% of eligible rehabilitation expenses; but properties must be listed or eligible to be listed in the Virginia Landmarks Register or contribute to a historic district listed in the state register. Rehabilitation work must comply with the Secretary of the Interior’s Standards for Rehabilitation.
- Federal Tax Credit: 10% credit available for non-historic commercial buildings that were “placed in service” prior to 1936 and are being rehabilitated for non-residential use.