Ad Valorem Tax Exemption

The City of St Petersburg has partnered with Pinellas County to offer the Ad Valorem Tax (AVT) Exemption for the rehabilitation of individually designated historic properties and contributing buildings in local or national historic districts. The AVT exemption is for up to ten years on increases in St. Petersburg and Pinellas County property taxes resulting from an approved renovation to a historic building. In effect, the exemption reduces the taxes that might be levied for improvements or building rehabilitation.

Applications must be pre-approved by the City. The approval process for the exemption is similar to the COA process. Rehabilitation projects must meet the Secretary of the Interior's Standards for Rehabilitation which ensures that the rehabilitation respects the historic character of the building while allowing for reasonable changes to meet the needs of the project. Qualifying expenditures are based on U.S. Treasury Regulation 1.48

What expenditures qualify for the AVT exemption?

Any expenditure for a structural component of a building will qualify for the AVT exemption. Treasury Regulation 1.48-1(e)(2) defines structural components to include walls, partitions, floors, ceilings, permanent coverings such as paneling or tiling, windows and doors, components of central air conditioning or heating systems, plumbing and plumbing fixtures, electrical wiring and lighting fixtures, chimneys, stairs, escalators, elevators, sprinkling systems, fire escapes, and other components related to the operation or maintenance of the building.

In addition to the above named "hard costs", there are "soft costs" which also qualify. These include construction period interest and taxes, architect fees, engineering fees, construction management costs, reasonable developer fees, and any other fees paid that would normally be charged to a capital account.

What expenditures do not qualify for the AVT exemption?

Qualified rehabilitation expenditures do not include:

1. Costs of acquiring the building or interest therein.
2. Enlargement costs which expand the total volume of the existing building. Interior modeling which increases floor space is not considered enlargement.
3. Expenditures attributable to work done to facilities related to a building such as parking lots, sidewalks and landscaping.
4. New building construction costs.

What are some examples of expenses that do not qualify for the rehabilitation tax credit?

• Acquisition costs
• Appliances
• Cabinets
• Carpeting (if tacked in place and not glued)
• Decks (not part of original building)
• Demolition costs (removal of a building on property site)
• Enlargement costs (increase in total volume)
• Fencing
• Feasibility studies
• Financing fees
• Furniture
• Landscaping
• Leasing Expenses
• Moving (building) costs (if part of acquisition)
• Outdoor lighting remote from building
• Parking lot
• Paving
• Planters
• Porches and Porticos (not part of original building)
• Retaining walls
• Sidewalks
• Signage
• Storm sewer construction costs
• Window treatments