Senate Bill 26-005

This act establishes a series of property tax incentives and financial benefits for the preservation and rehabilitation of historic properties. A qualifying historic property must be listed on the State Register of Historic Properties or designated as a historic landmark by a local government. Owners who complete rehabilitation work that preserves the property's historic character and complies with State Historical Society standards may claim a property tax credit equal to 15 percent of qualified rehabilitation expenses, up to $25,000 per property over a 10-year period. Unused credits may be carried forward for up to 10 years, provided the property continues to meet preservation requirements.

This act creates a tiered homestead exemption for owner-occupied historic properties. All qualifying properties may receive a $60,000 exemption from actual value; properties occupied by households earning below 100 percent of area median income may receive a $75,000 exemption; and households below 80 percent of area median income or properties located in qualifying rural or underserved areas may receive a $100,000 exemption. These benefits may be combined with other homestead exemptions, although total exemptions cannot exceed 50 percent of the property's actual value. Owners must continue occupying the property as their primary residence, maintain it according to preservation standards, and provide required income documentation.

This act provides additional protection for senior homeowners and properties undergoing rehabilitation. A historic property owned and occupied by a person 65 or older who has lived there for at least seven consecutive years may have its assessed value frozen at the level established when the owner first qualifies. The freeze continues while the owner remains in the residence and maintains preservation standards and may transfer to a surviving spouse who is at least 55 years old. Qualified rehabilitation also may not directly increase a property's assessed value by more than 3 percent annually for five years after the rehabilitation is completed. The act additionally creates a historic preservation grant program providing grants of up to $75,000 per project, generally requiring a 25 percent matching contribution and prioritizing deteriorating properties serving a public or community purpose.

This act requires recipients to maintain historic properties in good condition and comply with applicable preservation standards. If a property receiving benefits is demolished or altered in a way that destroys its historic character within 10 years, the owner must repay all tax credits, exemptions, and grants received, plus interest. Other failures to maintain compliance may result in revocation of benefits and repayment of tax credits or grants. This act was approved May 29, 2026, and is scheduled to take effect August 18, 2026, applying to property tax years beginning on or after that date.