- by Dan Becker, Preservation Raleigh Board Member
Are you the owner of a city- or county-designated Local Historic Landmark as of January 1, 2024? If so, look at your land valuation compared to non-designated adjacent parcels to see if the Tax Assessor has taken the historic landmark status into consideration in appraising it for tax purposes. You may find that the revaluation fails to take into account the restrictions on improvements to the land due to the landmark status of the property. If so, you may have a basis to appeal the valuation assigned to the land in your appraisal.
North Carolina General Statutes give specific direction to the county tax supervisor when appraising historic landmark property for tax purposes:
§ 160D-946. Required landmark designation procedures.
(7) Upon the adoption of the landmark regulation or any amendment to it, the preservation commission gives notice of the regulation or amendment to the tax supervisor of the county in which the property is located. The designation and any recorded restrictions upon the property limiting its use for preservation purposes shall be considered by the tax supervisor in appraising it for tax purposes. [emphasis added].
In Raleigh and Wake County, exterior changes to the designated property must receive a Certificate of Appropriateness based upon conformance with the applicable historic design standards. These standards place additional limitations upon the zoning envelope for improvements to the land generally permitted under the zoning. This reduces the utility and value of the land from what could be developed on otherwise similarly zoned and situated properties.
Reflecting the historic characteristics of the property, these design standards will in most cases limit the buildable footprint area and height for additions, reducing the potential habitable building floor area. The appraised value of land takes into account the zoning entitlements that attach to the parcel that give it value for residential or commercial development and use. A limitation on these entitlements is a limitation on the parcel’s utility, and thus should be recognized in a reduced valuation for the land.
Historic landmark status is effectively an easement upon the parcel that impacts the “bundle of property rights” available to an owner, reducing its potential value.
Every property owner has the right for an informal appeal of their tax appraisal. A carefully constructed analysis of the property should compare the existing landmark characteristics of habitable square footage, buildable area, and height to potential development under the property’s zoning category. The design standards for additions and new construction should be cited in demonstrating the limitations in potential development. The land value can reasonably be expected to be assessed at a 90% rate compared to adjacent and similarly situated parcels.
Links:
City of Raleigh Webpage for Raleigh Historic Landmarks
Sec. 10.2.16. Historic Landmark Designation. Raleigh Unified Development Ordinance (these links change frequently as the UDO is updated. If the link is broken, use the table of contents to find Sec. 10.2.16.)