Classic design, character, and intrigue - the allure of purchasing historic property is often as multi-faceted as the building or land itself. Throughout the USVI, the rich history contained within the thick Danish brick walls holds the distinction of being one of the most treasured historical places in all of the Caribbean. In just Christiansted, St. Croix, more than 27 acres of well-preserved 18th century Danish-inspired architecture gracefully expand from the shores of the Christiansted Harbor. And, a multitude of real estate opportunities awaits.
Vision is key when purchasing an historic property. Often the property needs repair or updating, and buyers should do their due diligence to ensure they are aware of the needs, benefits and local requirements surrounding the purchase of the storied property.
If you are concerned about structural integrity, for example, be certain to check out the rehabilitation regulations of the local preservation society. Perhaps discuss the building with a local preservation-oriented architect.
Many of us know the potential challenges, but the benefits can be great! Here we review some of the considerations and steps required when purchasing an historic property in Christiansted or Frederiksted, St. Croix.
- Federal Historic Preservation Tax Break
To qualify for this incentive, an owner needs to be certain the location is registered as an historic location. If it is not already, the owner secures a certification application from the National Park Service to be listed in the National Register of Historic Places. Once the application is approved, the government will shoulder 20% of the amount spent on renovations via tax breaks, provided certain conditions are met. One such condition is that the property must be income generating. Renting out a room or space in the property, constructing a home office, or opening a bed and breakfast or yoga studio within the space are just some ways owners can avail of this tax break.
- Easements from preservation societies
Historic property owners can get in touch with preservation societies at the city and state levels and coordinate with them about securing an easement. Essentially, an easement is a contract between a historic property owner and a historical preservation society. The agreement rewards with owner with reduced income tax or real estate tax with the promise of maintaining the property’s historical value. An easement is a permanent contract and is filed with the property’s deed that future owners can also benefit from.
- Rehabilitation credit
Owners who have properties that aren’t listed in the National Register of Historic Places can still apply for tax incentives for renovations. A 10% rehabilitation credit can be applied for at the National Park Service. This credit can be used for renovations to preserve a property’s historic character. Take note that this credit is only available for structures built before 1936.
- Historical preservation grants
Owners who look further will find that there are also a myriad of historical preservation grants available from philanthropic organizations. The National Trust for Historic Preservation is a good place to start searching. Add the Enterprise Zone through the EDA and the local Historic Preservation Office at the Department of Natural Resources. Both have great tax credit programs.
- Federal Housing Administration loans
Buyers who are eyeing a historic fix-upper have some great options for funding. The Federal Housing Administration has a program to grant loans at friendly terms for historic property restoration mortgages.
Interested in buying historic property in St. Croix? Blue Sky Real Estate represents large and small Caribbean real estate properties located all over St. Croix, St. Thomas, and St. John, US Virgin Islands. Whether you are interested in a luxury home, undeveloped land, condo, fix-upper, commercial property, a hilltop perch or a beachfront oasis, Blue Sky Real Estate can help.