If you’re on the hunt for a home that exudes character, history, and a touch of nostalgia, look no further than the world of historic properties. Buying a historic home is like stepping into a time capsule, where stories of the past are woven into the very fabric of the house. In this comprehensive guide, we will explore the reasons why investing in a historic home is a journey worth embarking on.
Buying a historic home can be a labor of love, complete with admiring neighbors, official recognition, and significant tax breaks. Or it can be a constant repair job, a money pit with little or no return on investment – which often can just be sweat equity. So, put on your explorer’s hat, grab a cup of coffee, and let’s delve into the captivating realm of historic home ownership and historic preservation.
If you’ve found a historic home in California and are committed to living in it, or fixing it up as a rental or investment, there are two words you need to know: Mills Act. This state law, enacted in 1972 and administered by the state Office of Historic Preservation, allows cities to enter into contracts with the owners of historic structures. These “historical property contracts” require a reduction of property taxes in exchange for the continued preservation of the residence.
Participating in the Mills program is voluntary. The contracts are administered by local historic authorities, which range from city to county planning departments to special historic-oversight districts. Some of these authorities limit the number of historical property contracts granted annually; others have no limits.
Each authority has a different application process, usually available online. Applying for a contract costs about $1,000. If your home is approved, the contract execution fee is about $550. Once approved, the authority sends out inspectors who are trained in historic-property requirements. You then have five to seven years to make any required repairs or upgrades so you can benefit from the tax incentives.
There’s something magical about the timeless beauty of a historic home. From the intricate architectural details to the ornate craftsmanship, every corner tells a story of a bygone era. Owning a historic property allows you to bask in the elegance and grace of a bygone era while creating a unique sanctuary that seamlessly blends the past and the present.
When you buy a historic home, you become a custodian of history. These homes often possess historical significance, having witnessed significant events or housed notable figures. By investing in a historic property, you contribute to the preservation of our rich cultural heritage, ensuring that future generations can marvel at the architectural marvels of the past.
From Victorian beauties to Colonial gems, historic homes offer architectural style arrays to suit every taste. Whether you’re drawn to the grandeur of Gothic Revival or the simplicity of Craftsman, buying a historic home allows you to embrace your preferred architectural style and indulge in the craftsmanship that defined an era.
One of the key aspects of owning a historic home is understanding the designation process. Many historic property selections are listed on the National Register of Historic Places or fall within designated historic districts. Familiarize yourself with the local regulations and guidelines governing historic preservation, as they may impact renovations, alterations, or additions to the property.
Investing in a historic home comes with financial benefits as well. State and federal governments often offer tax incentives, such as historic tax credits, to encourage the preservation of historic property. These credits can offset renovation costs and make owning a historic home a financially savvy decision.
Owning a historic home goes beyond the confines of your property; it connects you with a community of history enthusiasts. Local historical societies, preservation organizations, and neighborhood associations provide opportunities to engage with like-minded individuals, attend events, and share knowledge about preserving and appreciating historic homes.
To find out, we talked to several current and former residents, and an agent who helped a couple buy a historic home.
Kathy de los Monteros, a sales associate in our San Clemente location, has not only sold several historic homes in the seaside city, but also lives there in a 1929 Spanish Colonial Revival.
“We’ve always loved old things and antiques, and were really attracted to this house,” she said. “They can be lot of work to maintain, but you want to maintain them because they’re a treasure. Everyone I tell about my house says they want one.
“You receive tax incentives of up to 70 percent for owning, but you have to keep the home as historic and original as you can. They (historic authority inspectors) don’t care as much about the back of the house as the front. In San Clemente, whether you have the Mills Act or not, you have to keep the first 20 feet back from the front of your house in historic condition. So if you want to add on or build a second story, it would have to be 20 feet back.”
“We’ve been in ours 15 years now, and I would say our biggest satisfaction is just living there. It’s unique. It’s different.”
Margaret Irving, a sales associate in our Coronado Cays office, represented the buyers of another 1929 Spanish Colonial Revival in the Marston Hills neighborhood of San Diego.
“The couple loved the area and the house, which was owned by a friend who was downsizing from a much larger home in 2013,” she said. “It was three bedrooms with another optional bedroom, two and a half bathrooms, one story, and already had a designation from the City of San Diego Historical Resources Board as well as Mills Act in effect.
“They received a huge tax savings. They paid $1.25 million, but thanks to the Mills Act, the assessed value was only $240,000. So their taxes were only around $2,000 a year. About the only restriction is they can’t fix up the exterior of the house.”
Jeff Grant, a San Diego businessman, formerly owned the 1885 Faulk-Klauber house, a designated historic landmark in the Golden Hill neighborhood of San Diego. When he purchased it in 1978, it was already occupied by residential and office tenants, and had no Mills Act status. He lived in the carriage house for a while and did some minor upgrades, such as painting the exterior and adding a cupola. But the experience didn’t work out, and he sold the home after five years.
“It was zoned for mixed use with no standard tax break,” Grant said. “When I realized what it was going to cost fix it up, the numbers didn’t add up. The home had been renovated during World War II, but for me it was less about upkeep and more about cost containment.”
His advice for anyone considering buying a historic home:
“If you’re not a fixer-upper type, buy one that’s already in historic condition. If you’re handy, then sure, what the heck? Do your research before going into it to make sure it’s for you. For example, you might want to put in a skylight or a deck, but you can’t or you’ll lose your tax break.”
If you’re captivated by the charm and allure of historic houses, you’re not alone. The ability to choose any kind is one of the benefits of owning a home, after all. These architectural treasures offer a glimpse into the past, with their rich history and unique character. But buying a historic house requires a special approach in the house hunting process.
Before delving into the realm of historic houses, familiarize yourself with the designated historic district in your desired location. This historic district often have specific regulations and guidelines aimed at preserving the architectural integrity of the area. Understanding the parameters will help you narrow down your search and ensure compliance with preservation requirements.
Historic houses are a tapestry of stories, craftsmanship, and architectural splendor. Embrace the allure of older homes, knowing that each creaking floorboard and weathered brick holds a piece of history. However, be prepared for the unique challenges that come with owning an older home, such as maintenance and potential renovation needs.
Every historic house has its own story to tell. Research the historical significance of the property you’re interested in. Dig into archives, local historical societies, or consult with experts to uncover fascinating tales of the house’s past. Understanding the historical context adds depth and appreciation to your potential new home.
When navigating the intricate world of historic houses, it’s wise to seek guidance from preservation experts. One of the benefits of working with a real estate agent with experience in historic properties, historic preservation organizations, and local government offices is that they can provide invaluable advice and resources. They can guide you through the complexities of purchasing and maintaining a historic house.
Due diligence is essential when buying a historic house. Conduct a thorough inspection to assess the condition of the property. Look for signs of structural issues, water damage, or outdated electrical and plumbing systems. Engage the services of a qualified home inspector who understands the intricacies of older homes.
Investing in a historic house may come with financial benefits. Many governments offer a historic tax credit as an incentive for preserving these architectural gems. Research the available historic tax credit in your area and consult with tax professionals to understand how these incentives can positively impact your investment.
Owning a historic house is more than just having a place to call home; it’s becoming part of a vibrant community. Engage with local historical societies, attend events, and connect with fellow historic house enthusiasts. Sharing experiences, knowledge, and resources will enhance your journey as a historic homeowner.
Restoring and maintaining a historic house is a labor of love. Set aside a budget for renovations, repairs, and ongoing maintenance. Embrace the process of historical home restoration while incorporating modern amenities and conveniences.
When buying a historic house, don’t overlook the significance of the surrounding neighborhood. A vibrant historic neighborhood adds to the overall charm and value of your property. Explore the community’s history, amenities, and future development plans to ensure a harmonious fit.
Finally, as you embark on your historic house journey, take the time to appreciate the timeless beauty that awaits you. Embrace the intricate details, the unique architectural elements, and the stories embedded in every nook and cranny. Let your historic house become a cherished home where the past and the present intertwine in a symphony of elegance.
Buying a historic home is not just about acquiring a property; it’s about embracing a way of life. It’s about preserving history, indulging in architectural splendor, and immersing yourself in a community of like-minded individuals. So, if you’re captivated by the allure of the past and eager to embark on a journey of restoration, consider owning a historic home. Unlock the charm, uncover the stories, and create a future where the past gracefully intertwines with the present.
Remember, each historic home has its unique story and requirements. Seek guidance from real estate agents, preservation organizations, and local government offices to navigate the intricate world of historic home ownership. Now, let your dreams guide you as you embark on the enchanting quest of buying a historic home. Happy house hunting!
You need to stay on the lookout for historic homes because they tend to get snapped up fast. Your best bet is to connect with a real estate professional. If you’re interested in this home or others in the area, contact one of our Santa Monica REALTORS®to assist you with all your needs.
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It does sound so cool to own a historic home, but knowing that it has lived with so much history makes it such a daunting place to live in. Perhaps, have it as a business enterprise, like a public/private museum of some sort.
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