Financial assistance for private homeowners who wish to restore their houses is limited in the US. Fortunately, the State of Illinois has a program that can help. Since over a third of privately-owned Wright-designed houses are located in Illinois, this is potentially an important resource for many Wright homeowners.
In February, Safina Uberoi, who owns the Frederick and Grace Bagley House in Hinsdale, Illinois, with her husband Lukas Ruecker, sat down with Anthony Rubano, Illinois Deputy State Historic Preservation Officer, and with the Building Conservancy’s John Waters, to learn more about Illinois’ tax assessment freeze program and how it may assist Safina and Lukas in their restoration of the Bagley House.
The program appears complex at first, but Anthony is happy to meet with potential applicants and walk them through the process. In fact, he strongly encourages those contemplating restoration work to reach out to his office at the beginning of their planning process. This helps all parties understand each other’s expectations.
The goal of the program is to financially assist eligible restoration projects by freezing a house’s property taxes for eight years, starting at the end of the agreed-upon project. The eight-year phase is followed by a four-year period during which the assessed values step up to their then-current levels.
- This must be your primary residence.
- It must be designated “historic.” This can happen by the house’s listing on the National Register of Historic Places, either individually or as a contributing resource in a National Register District, or be listed individually as a local landmark, or as a contributing resource in a local landmark district, if the municipality in which the house is located has had its preservation ordinance certified by the State for the Tax Freeze program. Municipalities with ordinances certified for the freeze are listed on the program website.
- The budget for the planned work must exceed 25% of the house’s fair or estimated market value, as determined by the assessor. This amount is not the same as the assessed value. For instance, in Cook County, assessed value is typically 10% of the estimated property value. Talk with SHPO staff about what components of your project are qualified for meeting the 25% of market value requirement.
- All work must follow the Secretary of Interior’s Standards for the Treatment of Historic Properties. These guidelines are the accepted standards for historic preservation work in the US.
Discussing your project with the State Historic Preservation Office (SHPO) before you start, can help ensure your project will qualify for the tax assessment freeze program. Contact the SHPO at [email protected] or 217.524.0276
How the freeze would work at the Bagley House
Assessor’s Fair Market Value: Safina and Lukas purchased the Bagley House in 2021 for $1.3 million. According to the Cook County Assessor, its Estimated Property Value is $1,775,000. Safina and Lukas plan to appeal that value with the Assessor to align with the recent sale price. Successfully lowering the Assessor’s Fair Market Value would lower both the required project budget amount (of at least 25% of Estimated Value) and the value upon which the property taxes are calculated when the eight year freeze begins at the completion of the project.
Project Expenditure Minimum: assuming that the Assessor lowers its Fair Market Value to $1.3 million, then the qualified expenditures for the Bagley House would need to be at least $325,000 to qualify for the program.
Step 1: The first step is a simple confirmation that your house is “historic” under the program. Fill out Part 1 of the Certificate of Rehabilitation application. You don’t have to have your plans set at this point. The information required is basic:
- House location
- Contact information
- A few current, representative interior and exterior photos
- A brief statement of significance. In the case of the Bagley House, its listing as a local landmark in Hinsdale, whose ordinance is approved for the freeze program, confirms that it is “historic” under the program.
Step 2: When you have a plan, but before you start work, fill out Part 2 of the Certificate of Rehabilitation application to get your work approved. Anthony encourages owners to contact him or his office even before you fill out Part 2. As the process is one of collaboration between the homeowner and SHPO reviewer, regular communication is important. Part 2 lays out the project scope and approximate schedule (your schedule may change as the project progresses). Include photos and architectural drawings if your project has them. The SHPO will determine if the planned interior and exterior work complies with the Secretary of Interior’s Standards. Note that the SHPO’s interpretation of the Standards may differ from that of your local historic preservation commission.
Once your Part 2 is approved by the SHPO, proceed with the rehabilitation.
Step 3: Get your finished work approved. When the project is finished, fill out and submit Part 3 with photographs showing the completed work, a spreadsheet of expenses, and copies of receipts. If the SHPO determines the project meets all the requirements, it will email you and the assessor a Certificate of Rehabilitation.
When work is complete the assessment freeze period begins!
For the calendar year in which the assessor’s office receives the Certificate of Rehabilitation, it will return your house’s fair market value to the level it was at during the first year of project construction. The fair market value will remain there for eight years, and then over the next four years, will incrementally adjust the fair market value back up to the full value.
This program is one of the few financial incentives that applies to private residences. The Building Conservancy encourages all Illinois homeowners who are considering significant restoration to see if it can be advantageous for them.
Posted April 14, 2023