Question 1

What is a historic preservation easement in Florida?

Accepted Answer

A historic preservation easement is a legal agreement between a property owner and a qualified organization (government agency or nonprofit) that permanently restricts alterations to a historically significant property to preserve its architectural and historical character. In Florida, these easements: are voluntary (the property owner chooses to grant the easement), are recorded in the public records and run with the land (binding on future owners), restrict exterior modifications (and sometimes interior modifications) to maintain historical integrity, may qualify for tax benefits (federal income tax deduction, property tax reduction), and are authorized under Florida's Conservation and Preservation Lands Act and federal tax law (IRC §170(h)).

Question 2

What are the tax benefits of a historic preservation easement?

Accepted Answer

Tax benefits include: federal income tax deduction (the value of the easement donation is deductible as a charitable contribution; the deduction equals the difference between the property's value before and after the easement restrictions), Florida ad valorem property tax reduction (the property's assessed value may decrease to reflect the development restrictions), estate tax reduction (the reduced property value lowers the taxable estate), and potential state historic preservation tax credits. However, the IRS has increased scrutiny of conservation easement deductions, and overvaluation can result in penalties. A qualified appraisal is essential to support the deduction.

Question 3

What restrictions does a historic preservation easement impose?

Accepted Answer

Typical restrictions: no demolition of the historic structure (partial or complete), exterior modifications must be approved by the easement holder, changes must comply with the Secretary of the Interior's Standards for Rehabilitation, new construction on the property may be restricted (height, setback, design compatibility), signage and exterior lighting must be compatible with the historic character, routine maintenance must follow approved preservation methods, and the easement holder has the right to inspect the property periodically. The specific restrictions vary by easement; some are more restrictive than others. Violation of the easement terms can result in injunctive relief and damages.

Historic Preservation Easement

Historic Preservation Easement in Florida

Key Features

Tax Benefits

Restrictions

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