A rule to give owners of historic properties in Beaufort a tax incentive to rehabilitate their buildings has received preliminary approval from a Beaufort County Council committee.
Known as the Bailey Bill, the new program now heads to County Council for approval at its meeting Aug. 25 on Hilton Head Island.
Finance Committee members unanimously agreed Monday that the rule will help city planners revitalize historic Beaufort neighborhoods and allow the county to eventually expand its tax base.
"I liked the idea the first time I heard it, and I didn't expect any opposition on this," committee chairman Rick Caporale said.
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The rule will freeze a dilapidated historic property's tax assessment at its pre-renovation value for 10 years. In exchange, an owner must invest more than 75 percent of the property's market value into the restoration, according to Beaufort project development planner Lauren Kelly. The rule would apply to commercial and residential properties.
To be eligible for the program, buildings must either be within the Beaufort Historic District and be at least 50 years old, or they must be listed on the county's 1997 survey of above-ground historic sites.
At the end of that 10-year period, the tax freeze is lifted and the building reappraised at its post-renovation value, Kelly said.
"This bill would be revenue-neutral in the short term and revenue-positive in the long term," she said.
Newly renovated properties should help raise the value of surrounding properties, Beaufort Mayor Billy Keyserling added.
City planners have found that owners who renovated buildings paid an average of $310 more per building, per year in county taxes over their pre-renovation taxes, Kelly said.
There are 813 properties eligible for the program, but Beaufort finance director Kathy Todd estimates about 366 might realistically participate, given the investment requirements.
Based on the city's study, the county could expect a 53 percent increase, on average, in taxes paid on each property at the end of the 10-year freeze, Todd said. If the renovations spur development of nearby vacant lots, the tax base expands even more, Kelly and Todd said.
Beaufort City Council approved the bill this year and has asked the county to participate to expand the effect of the tax incentive. Several Beaufort groups have lobbied for the rule, including the Historic Review Board, Historic Beaufort Foundation and the Beaufort Regional Chamber of Commerce.
However, the Beaufort County School District will not participate, the Board of Education decided last month.
Follow reporter Zach Murdock at twitter.com/IPBG_Zach.
- School board says 'no' to Beaufort economic development plan, Aug. 5, 2014
- School district asked to help with program to rehabilitate historic Beaufort buildings, June 21, 2014
- More than 800 Beaufort structures eligible for tax incentive for historic home renovations, March 25, 2014
- 'Bailey Bill' could help foster investments in historic homes, Feb. 1, 2014