Property Values and Taxes

There is a common misconception among Canadian property owners surrounding designated heritage sites.  Many believe that designation reduces property value and creates financial stress.  However, studies have shown that heritage conservation projects increase property values, assessment values, and economic activities in surrounding areas.  From municipal to federal levels, many programs are designed to assist with the maintenance and success of designated historic sites.  This is because historic designations do not only benefit property owners, but also stimulate local economies.  Property owners witness their properties performing better than average in the real estate market while municipalities benefit from increased revenues, thus encouraging local governments to support designated heritage sites.

Various municipalities in Canada approach the issue of heritage conservation and rehabilitation in different manners.  However, all share the goal of effectively administering programs which benefit municipalities and homeowners alike.  For example, the City of Victoria, British Columbia, has implemented a tax incentive program intended for the residential conversion of heritage buildings.  This program includes a tax exemption between one and ten years - a very appealing concept.  Exemptions are relative to the cost of seismic upgrading that the building requires.  Not surprisingly, Victoria's incentives have made a significant difference.  As a result of tax incentives, $32 million worth of investment has gone into the rehabilitation of 14 heritage buildings.  For example, Thomas Hooper's St. Joseph's Hospital, a 1908 construction for the Sister of St. Ann, was converted into 70 units of affordable housing in 2003.  This $1.6 million project was done through an adaptive reuse investment.  While being exempted from taxes for ten years, additional incentives amounted to $44, 993.  St. Joseph's Hospital is an inspirational example for property owners contemplating designation.  In addition, Victoria's tax incentive program produced a 60.3% increase in property taxes as well as $55.8 million in private investment - noteworthy economic stimulation for the municipal area.

Naturally, Victoria is not the only district in Canada that financially supports heritage designation.  Winnipeg provides an excellent example of success in arts and business.  Pantages Playhouse Theatre NHS, a former vaudeville theatre built in the early twentieth century, is assisted by Winnipeg's heritage support program.  Restoration of local theatres not only financially stimulates the business but also does the same for surrounding establishments such as restaurants and cafes.  Choosing to recognize heritage buildings is beneficial for the entire community.  Grants and financial assistance are available to sites such as the Pantages Playhouse Theatre NHS which are listed on Winnipeg's Building Conservation List - the catalogue of local heritage buildings.  Winnipeg's policies are careful to address the specific needs of heritage designations, and treat all sites with equal fairness.  Aiming to preserve, stabilize, restore, and rehabilitate local historic sites, Winnipeg's program is accessible to property owners and long-term tenants who wish to receive up to 50% of the net private investment through tax credit.

Similarly, Edmonton promotes the rehabilitation and maintenance of its designated Municipal Historic Resources in accordance with its heritage policy.  Like Victoria and Winnipeg, Edmonton supports its local designated sites listed on the Register of Historic Resources in Edmonton.  Sites such as the A. MacDonald Building are eligible to receive up to 50% of project costs as a rehabilitation incentive and 30% of maintenance project costs to a maximum of $50,000, renewable every five years.  As a prominent commercial building, the A. MacDonald Building is a former warehouse and office structure that has been transformed into condominium apartments.  Of course, Edmonton offers support to more than just its commercial structures.  Residential buildings are eligible for 50% of project costs to a maximum of $75,000 as a rehabilitation incentive and 30% of maintenance project costs to a maximum of $10,000, renewable every five years.  It is clear that Canadian cities take great care in assisting the success of their heritage sites.   Programs similar to those of Victoria, Winnipeg, and Edmonton are found throughout all of Canada.

But what about property value within the real estate market?  A study of almost 3,000 varying properties in 24 Ontario communities concluded that designated sites are not hindered by their status.  59% of designated heritage properties had higher than average property values for their respective areas, while 15% were equal to average.  Even during the downward real estate trend, designated heritage properties did not suffer due to their recognition.  47% of properties increased in value during the downward trend, whereas 32% performed the same as average.  With accessible financial support programs and successful real estate performance, heritage designation is definitely a smart decision for property owners.