The IRS has actually codified this jump in values. They have found that improving the public sidewalk that runs adjacent to a homeowner’s property will boost the appraised value of the private property. They also found that installing historic brick sidewalks within an historic district can boost the value from 10% to as much as 30%. (Assuming you take care of them, of course with proper maintenance.)
Considering the cost of doing so usually ranges from less than $5,000 to $10,000; and the average home value in Newburyport is $375,700; even a moderately priced home can see an inexpensive way to raise its value considerably.
So why would the mighty Internal Revenue Service even care about this phenomena?
Because giving donations to your local municipality is tax-deductible. In particular, in a situation where the sidewalks are not taken care of properly as is the case in Newburyport, many responsible citizens especially local ones have taken it upon themselves to improve their street frontage. As historic districts become common throughout the United States; many of these taxpayers have taken their contributions to the city property as a deduction.
But the IRS feels that if you are actually getting a huge benefit out of doing so; you have no right to request for it.
They have felt so strongly about it; they took some claimers to court and in two separate cases; won them both: , Myers vs US, 1980 and McConnell vs. US, 1988. The net result has been that if you do put in brick sidewalks within the Newburyport Historic District; you will get that exhilarating boost in your equity and property values. You will just have to settle with the fact that you are helping the City of Newburyport as a good citizen as well.
So, if you live in the Newburyport Historic District (check the street listing) and want to boost your property values in a cheap way and help the city in boosting heritage tourism; this is the procedure. Hundreds who “get it” about Newburyport are doing it, and more and more wise owners are enjoying the benefits. If you already have brick sidewalks in front of your home, historic or not (doesn’t make a difference as long as you’re in the district) and are enjoying the benefits; be sure to take care of them and repair them to a smooth surface (Its cheap to maintain them too!) to sustain that property boost.
So what about those who are outside of the historic district? Fogettaboutit! The IRS says you get a big boost out of improving the sidewalks, perhaps not as much as in an historic district but significant enough that you are not eligible for a tax deduction either.
Therefore, the whiny homeowners balking at improving the adjacent sidewalk and street trees are not only selfish, and irresponsible citizens*; they are clueless on the benefits of obeying our present ordinance!
- For the Nitpickers; I spoke to Rick Taylor, IRS Agent, Special Research Division, Denver, Colorado in 2013, who confirmed this information. Pertaining to this subject, I recommend the following reading material:
IRS Publication 530 – Tax Information for Homeowners – very interesting section on tax deductions for National Register property!
IRS Publication 526 – Charitable Contributions
IRS Publication 561- Determining the Value of Donated Property
Form 8283-If non-cash donation is over $5,000 – if incorrectly calculated, 20-40% penalty
A Cheap Way to Raise Your Property Values, Brick& Tree Blog, July 8, 2013.
* I firmly believe the balkers against our current ordinance who are pushing for this odious ordinance are actual developers and the Mayor and a select group of city councilors are using this scenario as a cover. Just my opinion, firmly held.