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Description of the
The Compensation Fund is a special state fund without legal personality, administered by the Supreme Authority for the Protection of Historical Monuments, the State Ministry of Science and the Arts. Its funding is governed by Section 19(3) of the Bavarian Monument Protection Act (BayDSchG); it is borne in equal parts by the Free State and the local authorities. The fund is set aside for compensation in the event of expropriation under Section 18 of the Bavarian Monument Protection Act, compensation for unreasonable burdens under Article 4(3) of the Bavarian Monument Protection Act (BayDSchG), and for restoration measures under Article 4(1) of the Bavarian Monument Protection Act (BayDSchG) (Article 19(1), first sentence, of the Bavarian Monument Protection Act (BayDSchG)).
Funding may take the form of grants and/or low-interest or interest-free loans. The type (grant and/or loan) and the specific amount are determined only following the so-called ‘reasonableness test’. This is carried out by the State Ministry of Science and the Arts as part of the compensation fund procedure. In this process, the financial and economic circumstances of the monument owner (and, where applicable, their relatives affected by the measure) are examined to determine the extent to which carrying out the restoration work would place a burden on the monument owner that goes beyond the scope of the social obligations associated with ownership (Article 14(2) of the Basic Law) and must therefore be compensated. For the so-called ‘reasonableness test’, overviews and documents (including tax-related ones) regarding the owner’s financial situation and their current income and expenditure must be submitted. The assessment also examines the extent to which refinancing may be possible, for example with regard to future potential uses of the historic building or with regard to future reductions in income tax due to increased tax-deductible allowances. All amounts mentioned during preliminary discussions are non-binding until final approval has been granted by the Bavarian State Office for the Preservation of Historical Monuments.
For grants of EUR 250,000 or more, a special condition is imposed requiring a notarised, limited personal easement for the preservation of the monument to be entered in the land register (with the exception of rooms used for religious services). In individual cases, the disbursement of funds from the compensation fund is subject to a special condition linking it to a value compensation clause in the grant notice. Accordingly, should the owner sell the listed building, they must pay appropriate compensation to the compensation fund within a specified period (usually 45 years).
Prerequisites
Grants and/or loans from the Compensation Fund under the Bavarian Monument Protection Act (BayDSchG) are primarily intended for extensive work on monuments of supra-regional significance that are at acute risk. Among other things, they are subject to the condition that the monument owner cannot reasonably be expected to bear the full costs of restoration. A thorough examination of the monument owner’s financial circumstances is therefore of great importance in the procedure.
Deadlines
If you wish to apply for grants and/or loans from the compensation fund under the BayDSchG, your application must be submitted before the project begins.
Support is ruled out from the outset if work on the project has already begun or if the project has even been completed. Further information is available from your local heritage protection authority and the State Office for the Preservation of Historical Monuments.
Costs
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Procedure
If you wish to apply for grants and/or loans from the Compensation Fund under the Bavarian Monument Protection Act (BayDSchG), you must contact the local monument protection authority. The local heritage protection authorities (usually district offices, independent cities and major district towns) apply to the Bavarian State Office for the Preservation of Historical Monuments for funding from the Compensation Fund.
The administrative procedures and responsibilities involved in claiming from the compensation fund:
- The State Office for the Preservation of Historical Monuments selects suitable properties in collaboration with the local heritage protection authority.
- With the support of the local heritage protection authority, the State Office for the Preservation of Historical Monuments records the master data, the relevant cost figures and the funding proposal (Part I of the data sheet) and lists the measures in a planning schedule.
- From the planning list, the State Office for the Preservation of Historical Monuments proposes measures for the twice-yearly consultation with the Bavarian Association of Towns and Municipalities, in respect of which the procedure for claiming from the compensation fund is initiated. On this basis, the State Office for the Preservation of Historical Monuments grants authorisation to submit an application by forwarding Part I of the data sheet to the local monument protection authority. The owner of the monument receives a copy of this for information purposes. If necessary, a funding consultation is held before the data sheet is authorised.
- The Lower Heritage Protection Authority processes the application, with the cooperation of the heritage property owner, together with the owner’s declaration (Part II of the data sheet), and forwards it, together with the technical heritage documentation, to the State Office for the Preservation of Historical Monuments. At the same time, it informs the owner of the listed building about the documents to be submitted to the State Ministry of Science and the Arts for the so-called ‘reasonableness test’ (an assessment of the owner’s financial and economic circumstances). The owner of the listed building receives a copy of Part II of the data sheet for information purposes.
- The State Office for the Preservation of Historical Monuments submits the key technical parameters relating to the restoration procedure to the State Ministry of Science and the Arts for the reasonableness assessment (Part III of the data sheet). The owner of the monument receives a copy of this.
- As part of the reasonableness assessment, the State Ministry for Science and the Arts makes a binding determination regarding the type of funding (grant and/or loan) and the specific amount of the grant. On this basis, the State Office for the Preservation of Historical Monuments issues the decision (grant decision or first decision), subject to reservation.
- Once the work has been completed, the Lower Heritage Protection Authority checks the final invoice from both a financial and a technical perspective and sends a copy of the audited statement of expenditure to the State Office for the Preservation of Historical Monuments. The State Office for the Preservation of Historical Monuments then carries out a final review of the statement of expenditure from a heritage conservation perspective, determining in particular which costs are eligible for funding and calculating the amount of the grants due. On this basis, the State Office for the Preservation of Historical Monuments makes a final decision on the amount of the grant and asserts any claims for repayment (final decision or second decision).
Please note: All relevant forms (data sheets, documents relating to the reasonableness assessment, sample liquidity reports, etc.) can be viewed on the website of the State Office for the Preservation of Historical Monuments under the ‘Compensation Fund’ button:
Notes
The state, numerous local authorities and associations of local authorities, as well as many other public or private organisations, support measures for the conservation of historic monuments through grants or, in some cases, loans. The funding options are very diverse. If you are interested in such funding, you should seek advice at an early stage from your local heritage protection authority (districts, municipalities independent of a district and major district towns) and/or the State Office for the Preservation of Historical Monuments. The State Office also provides free information material, which you are welcome to request.
In addition to grants and/or loans from the compensation fund under the Bavarian Monument Protection Act (BayDSchG), grants from the Bavarian State Office for the Preservation of Historical Monuments (see service “Monument protection; Applying for a grant from the State Office for the Preservation of Historical Monuments” under “Related Topics”) may also be applied for.
As well as grants and loans, you can often also take advantage of tax relief schemes designed specifically for owners of listed buildings.
Tax benefits under the Income Tax Act (EStG): This – indirect – financial support may be granted for the majority of conservation measures. A certificate for submission to the relevant tax office is usually issued by the State Office for the Preservation of Historical Monuments (see the service ‘Heritage protection; applying for a certificate for tax purposes’ under ‘Related topics’).