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Historic Façade Easement Program

Provides Substantial Tax Benefits

By Barry E. Hager

How can the owner of an historic building assure that his or her property will be preserved for the future and obtain a significant tax benefit at the same time? The answer is to donate a preservation easement to a tax-exempt charitable organization, such as SOHO.

An easement is simply an agreement between a property owner (the grantor) and the holder of the easement (the grantee) which transfers some interest or right to the property short of outright ownership. Common examples of easements are rights-of-way, access easements or utility easements. The grantor still owns the property, subject to the rights conferred upon the grantee.

In the context of easements for preservation purposes, there are significant tax benefits available to a property owner. Under federal tax law, an owner is allowed to take a charitable contribution deduction for federal income, estate and gift tax purposes for the value of an easement donated to a tax-exempt charitable organization for defined conservation purposes. Such conservation purposes include the preservation of an historically important land area or a certified historic structure. If the donation meets the criteria, the owner gets a charitable deduction equal to the fair market value of the donated interest. State and local property tax benefits also apply to the easement.

The most common type of preservation easement is the exterior or façade easement, which protects the outside appearance of a building. These easements usually control exterior alterations, require proper maintenance of the property and may include rights to open space around the building. A façade easement protects the exterior of the building, while permitting the property owner to have the unfettered use of the building's interior.

There are many advantages to using easements as a preservation tool. Preservation easements can be attractive to the property owner, since the property remains in private hands and the owner enjoys full use of the property, subject only to the restrictions set forth in the easement, while taking a tax deduction equal to the value of the easement donated. For the charitable organization, preservation easements are a low-cost way of protecting valuable historic resources.

As part of its preservation mission, SOHO has a façade easement program in place which already has been used to preserve various historic landmarks, such as the Mission Brewery Plaza. We are actively looking for more candidates for façade easements. If you own or know someone who owns an historic property, is concerned about preserving the historic aspects of the property and could use a significant tax break, please contact our offices. Everybody wins with a preservation easement!

2001 - Volume 32, Issue 1


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SOHO Succeeds in Removing Warner Ranch from Most Endangered List!

President's Message

The La Jolla Saga Continues

SOHO's Preservation Revolving Fund
Update on the Whaley House

Whaley House Garden Restoration Project

Haunted Houses: Preservation Help or Horror?
Historic Façade Easement Program

Villa Montezuma Provides Lessons in Color

California Preservation Foundation 26th Annual Conference

History Alive! Chautauqua

The Binational Preservation Front
SOHO's 2001 People In Preservation Awards

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