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Neighborhood Preservation Act:
What is the Neighborhood Preservation Act? In Senate Bill 20, enacted during the 1999 Legislative Session, the Missouri General Assembly authorized a State Tax Credit program to encourage reinvestment in older neighborhoods. The approval of this bill was a top legislative priority of County Executive Buzz Westfall. The program provides tax credits to offset part of the cost of investment in repair or construction of owner-occupied housing in moderate income neighborhoods throughout Missouri. Governor Mel Carnahan signed the bill into law on July 8, 1999. Taxpayers may apply for credits now. Legislators who played a key role in passage of the bill included: Sen. William (Lacey) Clay, Sen. Wayne Goode, Rep. Jim Foley, Rep. Rita Days, Rep. Joan Bray and many other legislators from St. Louis County and the City of St. Louis. The bill authorizes $16 million in tax credits statewide. Who is eligible to participate? Eligibility is based on the location of the property. The income of the taxpayer is not a factor. Neighborhoods are assigned eligibility based on Median Household Income from the most recent decennial Census. There are two categories of eligibility: "Eligible Areas (Level 1)" neighborhoods These are census block groups with median household income between 70% and 90% of the Metropolitan Area median. For the St. Louis area this means 2000 Census median household incomes below $40,889 but above $31,802 . A total of $8 million in tax credits per year is authorized for these neighborhoods. "Qualifying Areas (Level 2)" neighborhoods Also described in the bill as "distressed communities", these are census block groups or entire municipalities with median household income below 70% of the Metropolitan Area median. For the St. Louis area this means 2000 Census median household incomes below $31,802. A total of $8 million in tax credits per year is authorized for these neighborhoods.The entire City of St. Louis qualifies at this level. St. Louis County municipalities that qualify in their entirety are Hillsdale, Kinloch, Maplewood, Pagedale, Pine Lawn and Wellston. Check to see if you are eligible How much are the tax credits worth? Three types of credits are available: 25% tax credit on a minimum expenditure of $10,000 in "Level 1" or "Eligible" neighborhoods 25% tax credit on a minimum expenditure of $5,000 in "Level 2" or "Qualifying" neighborhoods. 35% tax credit on minimum expenditure of 50% of base value of property - available only in areas below 70% of Metro area median income (Level 2 or "Qualifying" areas). Homes must be 50 years old and credits cannot exceed $70,000 per unit or $3 million per project over a 10 year period. 15% credit in eligible neighborhoods. However, it must be in replacement of a home 40 or more years old in "Level 1" neighborhoods. In "Level 2" or "Qualifying" neighborhoods, new construction can take place on land that has been vacant for at least two years or where a housing unit has been condemned by the local government. No more than $25,000 in credits can be awarded per house during a 10 year period in level 1 neighborhoods and no more than $40,000 in level 2 areas. Are the tax credits transferable? Tax credits may be applied to the past three years of tax returns and to the next five years of tax returns. In addition, tax credits may be transferred, assigned or sold. Will this program be used for rental property? No. The program is limited to property that is owner occupied or will be sold to an owner occupant within one year. When does the program start? The program started on January 1, 2000. Expenditures made before that date are not eligible for tax credits. For more information: Call the Missouri Department |
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