By agreeing to sell a historic home to someone who would restore and live in the home, the seller would receive an exemption from the state share of the real-estate transfer tax. The original bill, which passed the House but stalled in the Senate at the end of the session late last year, allowed homeowners to take deductions for the full amount of a restoration. The Ridge administration rejected that proposal as excessive, Tangretti said. Pennsylvania boasts among the highest number of historic properties in the country. But in urban areas, especially Philadelphia and Pittsburgh where the population has declined, some historic neighborhoods have been forgotten.
Tax credits are quite significant in terms of stimulating rehabilitation in historic areas.
Philadelphia-area preservationists say such a bill would slow sprawl and make communities more attractive. Under existing law, developers are allowed a 20 percent tax credit for rehabilitating historic buildings for commercial use. A proposal to create a federal tax credit for residential properties is pending in Congress. New Jersey has neither tax abatements nor tax credits, but preservationists there say a measure that eases building codes for historic buildings has spurred rehabilitation in many areas. In Delaware, a historic preservation tax-credit bill similar to the one in Pennsylvania recently passed the legislature and awaits the governor's signature.