Available Incentives for Historic Building Owners

State Historic Building Code (SHBC)

Available to: All San José Historic Resources

The SHBC allows reasonable alternatives to the requirements of regular codes and ordinances, applicable to all qualified historic resources. Any condition permitted to continue within existing occupancies is permissible in historic buildings. CHBC Part 8, Title 24, regulations require enforcing agencies to accept reasonably equivalent alternatives to the regular code.

San José Zoning Ordinance Flexibility for Reuse of Historic Structures

Available to: City Landmarks

Pursuant to Chapter 20.80 of the Zoning Ordinance, uses of a City Landmark that would not otherwise be allowed in the applicable Zoning District may be considered through a discretionary use permit in order to facilitate appropriate and compatible reuse of the City Landmark.

Mills Act / Historical Property Contract

Available to: City Landmarks

The Historical Property Contract is a contract between the City of San José and the owner of a designated City landmark. The contract allows the owner to enjoy a reduced property tax rate from the county assessor in exchange for the preservation, restoration, and rehabilitation of the owner’s historic property. The purpose of the agreement is to provide greater protection for the City landmark property than is otherwise provided by the municipal code by requiring 10% of annual savings are to be used towards rehabilitation and/or maintenance.

City of San José Building Tax Exemption

Available to: City Landmarks

Building and structure (B&S) construction tax (5% of improvement value)
Commercial / residential / mobile-home park (CRMP) tax (5% of improvement value)

Federal Tax Credits

Available to: City Landmarks

A tax credit differs from an income tax deduction. An income tax deduction lowers the amount of income subject to taxation. A tax credit lowers the amount of tax owed. In general, a dollar of tax credit reduces the amount of income tax owed by one dollar. The two credits are mutually exclusive. Only one applies to a given project. Which credit applies depends on the building – not on the owner’s preference.

20% Federal Tax Credit

Available to: Income Producing Historic (National Register) buildings

The 20% rehabilitation tax credit equals 20% of the amount spent in a certified rehabilitation of a certified historic structure. The 20% credit is available for properties rehabilitated for commercial, industrial, agricultural, or rental residential purposes. It is not available for properties used exclusively as the owner’s private residence. The 20% rehabilitation tax credit applies only to certified historic structures, and may include buildings built after 1936.

10% Federal Tax Credit

Available to: Income Producing Non-Historic (National Register) buildings built before 1936

The 10% rehabilitation tax credit equals 10% of the amount spent to rehabilitate a non-historic building built before 1936. The 10% rehabilitation tax credit applies only to non-historic, nonresidential buildings built before 1936.

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