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HERITAGE BUILDINGS: GOVERNMENT’S BLIND SPOT, OWNERS’ HEADACHE

Several Countries Protect Their Architectural Heritage By Giving Tax Relief And Financial Aid To Owners Of Old Property

Owners of heritage properties in Florida are eligible for a tax freeze for upto a decade after a restoration project.
 

Heritage properties in some German cities are taxed at 40 per cent of their value or, in some cases, even exempted from payment of tax depending on their maintenance cost and restoration expenditure.

Turkey has property tax exemption for heritage buildings.

France gives owners of heritage properties 50 per cent tax credit for maintenance and restoration.
 And, in Salzburg and Graz in Austria, a Historic Town Centre Preservation Fund gives grants to landlords having properties in certain protection zones in town centres.

Governments across the world may be thinking of new ways to protect their countries’ architectural heritage but, in Mumbai, a combination of state policies and lack of financial assistance have actually encouraged builders to pull down grade-III heritage buildings. TOI, over the past four days, has reported how Mumbai has been steadily losing its architectural heritage in old residential enclaves.
 Heritage conservationists say they cannot blame the proprietors for selling off their old properties. Neither the state government nor the Brihanmumbai Municipal Corporation (BMC) has any economic incentive for landlords of bungalows, mansions and cottages having heritage value, making it more lucrative for them to sell or redevelop their properties with the help of builders.
    In 1992, three years before the city’s heritage regulations came into force, a panel of experts appointed by the state urban development department suggested that a combination of restrictive legislation — preventing the destruction of such buildings — and financial incentives (to encourage upkeep and improvements) would offer conservation a lifeline.
    “The justification for financial assistance to property owners is based on two considerations: the loss of potential market value of the property because of restrictions on development and the inhibiting effects of the Rent Control Act which deprive owners of the financial means to support the property,’’ the committee on conservation of heritage buildings and precincts noted.
    The report recommended decontrolling rent, tax relief, grants and loans and transfer of development rights as measures to “stimulate conservation’’.
    “But these provisions were not incorporated when the heritage regulations were finalised in 1995,’’ conservation architect Pankaj Joshi told TOI on Wednesday.
    But other global cities, which Mumbai’s administrators want to emulate from time to time, have systems in place to protect and conserve heritage properties, including those owned by private landlords.
    Rules in Shanghai include supplementary penalties, ranging from fines to criminal and legal responsibility, for people who fail to protect their heritage properties.
    “The owners or users of heritage properties in Shanghai have to take the responsibility of protecting them. The local government gives political or financial support for their maintenance and has set up heritage protection funds that are sourced from government budgets, personal or organisational donations and publicowned heritage property renting benefits,’’ a Shanghai government official said.
    Architect Anne Warr, one of the founding members of the voluntary group Save Shanghai Heritage, said: “The Shanghai abattoirs — fascinating buildings from the 1930s — have been leased to a company for use as a ‘creative centre’. The leasing company has architects to design the work but the expenses are paid by the local government, which holds the lease.’’
    Warr added: “The Shanghai municipal government has been busy over the last decade setting in place
legislation and guidelines to protect the city’s heritage. They are fasttracking, as much as possible, the work that has taken many other cities decades to achieve. There is still much to be done, of course, and the municipal government realises that protection of the city’s heritage is much more than just listing places and putting plaques on buildings.’’
    Cornell University’s Historic Preservation Planning Programme director Michael Tomlan told TOI: “There are federal, state and local laws in the United States and national, county and local laws in the United Kingdom. Local officials, spurred by citizens and advocacy groups, can issue citations for lack of maintenance and this should be done in Mumbai, too. The property can be taken away from its owners by a court order in extreme cases.’’
    Both direct and indirect tax benefits were provided as incentives to the property owner or the lessee in some cases.
    “Selling a heritage property that has been improved in this fashion generally carries financial penalties; one cannot ‘flip’ the property for profit after using financial incentives,’’ he observed.
    There were several studies demonstrating the economic benefits (in tourist dollars) of historic preservation efforts, he added.
    The UK government’s statutory adviser on historic environment, English Heritage, can give grants to heritage buildings listed grade I or II; the grants can range between 40 and 60 per cent of the costs.
    It also has a heritage economic regeneration scheme which may provide grants for private owners of grade-II buildings, in notified conservation areas, for certain type of works.
    Financial help is available in Scotland through the Historic Buildings Repair Grants Scheme for private owners to meet the cost of high-quality repairs.
    Historic Scotland, a local government agency, claims to have given grants totalling £ 48 million between 1999 and 2004 for assisting repair jobs.
    “Owners must insure and maintain the building and allow some access to visitors,’’ the agency said.
    Mumbai-based conservation architect David Cardoz gave the example of incentives available for citizens in Singapore.
    “They are given tax breaks if their private gardens, touching the road, are kept visually open to the public. Such innovative methods could be adopted here in Mumbai for those living in or owning heritage properties,’’ he said.