BALTIMORE CITY'S TAX CREDIT FOR HISTORIC RESTORATIONS AND REHABILITATIONS

 

 

 

HISTORIC RESTORATION AND REHABILITATION TAX CREDIT

A new tax incentive for Historic Landmarks and Districts Baltimore City is offering a new property tax incentive program that will save thousands of dollars for owners of landmark designated properties and properties located in one of the city's historic districts. Properties individually included in the Baltimore City Landmark list and the National Register of Historic Places, as well as properties located within local districts (approximately 7,000 properties) and national districts (approximately 14,000 properties) will benefit. The new program, called the Property Tax Credit for Historic Restorations and Rehabilitations, is a 10 year, comprehensive tax program that helps the City in its mission to preserve Baltimore's historic neighborhoods by encouraging property owners in these districts to complete substantive rehabilitation projects. The program keeps the assessed tax of the renovated or rehabilitated property at the same level as it was before the start of renovation for the next 10 years. Credit is for 100% of the City tax assessment increase if the rehabilitation of the property is certified by the Commission for Historical and Architectural Preservation (CHAP).

  • This is Baltimore City's first tax credit designed to benefit owners of historically designated property.
  • Ten-year tax credit for all renovations, interior and exterior, is the most generous in Baltimore City and will be the most comprehensive in the country. 
  • Credit will benefit both homeowners and businesses.
  • Goal of the program is to help preserve Baltimore's neighborhoods by encouraging restoration and rehabilitation.
  • Credit is fully transferable to a new owner for the remaining life of the credit
 

You may be eligible for a tax credit if you complete rehabilitation of historic property located in:

National Register Historic District Historic District

Barre Circle 
Bolton Hill  .
Brick Hill  
Business and Government Center 
Butcher's Hill 
Canton 
Cathedral Hill
Charles Village Abell Loft*
Dickeyville 
Druid Hill Park 
Dundalk
Federal Hill
Fells Point
Franklin Square
Little Montgomery Street
Loft
Market Center (Pending) 
Original Northwood
Old Goucher
Ridgely's Delight 
Roland Park
Saint Paul Street 
Seton Hill 

Baltimore City Historic District

Bancroft Park
Bolton Hill*
Butcher's Hill**
Dickeyville*
Eutaw Place/Madison Ave.
Franklintown
Loft*
Madison Park
Mill Hill Deck of Cards  
Mount Royal Terrace
Mount Vernon**
Mount Washington
Otterbein
Ridgley's Delight*
Seton Hill*
Stirling Street
Union Square*
Upton's Marble Hill
Washington Hill
Waverly
Union Square

   * Also a National Register Historic District
 ** Section of larger National Register Historic District
 

How do I apply for the credit?

  • First contact the Baltimore City Commission for Historical and Architectural Preservation (CHAP) at 410-396-4866, x-4, to request an application form.
  • Your property must be historically designated (Baltimore City Landmark, National Register individual designation, or contributing to either a Baltimore City or National Register Historic District).
  • Your restoration or rehabilitation plans must be reviewed and approved by CHAP before you begin any work on your building, if you wish to receive the tax credit. Rehabilitation must follow CHAP's Historic Preservation Guidelines.
  • You must invest a minimum of 25% of the full cash value of your building.


How do I receive the credit?

  •  CHAP will review your plans before you begin work (pre- certification) and then inspect the actual work ~ its completion (final certification)
  • Upon completion of the work, CHAP forwards a copy of the approved application to the State Department of Taxation.
  • The State Department of Taxation will advise Baltimore City's Department of Collections regarding the amount of tax credit and a new bill will be sent to you, the property owner.

Note: The credit will be equal to 100% of the eligible expenditure which would result in an increase in City property tax payable.

 

Examples of Tax Savings

* Substantial improvement of a property does not necessarily result in a -
property value increase for tax purposes. All examples are for illustration 1 purposes. Actual circumstances of assessments may vary from the example.

Average Commercial Property
Example: An owner of a two story building, who runs a business on the ground floor and resides on the top floor, decides to make a substantial improvement. After the improvements, the property's value increases &from $283,000 to $458,000. The assessment also increases from $113,200 to $183,200. The historic tax credit program may save the property owner as much as $40,000 in property taxes over the life of the credit.

Average Apartment Property
Example: An apartment owner rehabs existing units and adds 10 new units. The improvement and expansion increases the property value from $430,000 to $930,000. The assessment also increases from $172,000 to $372,000. The historic tax credit program may save the property owner as much as $117,000 in property taxes over the life of the credit.

Hotel Property
Example: An hotel owner rehabs and doubles the number of existing rooms. The rehab and expansion increases the property value & from $2.4 million to $3.6 million. The assessment also increases from $960,000 to $1.4 million. The historic tax credit program may save the property owner as much as $280,000 in property taxes over the life of the credit.

Average  Owner-Occupied Residential Property
Example: A rehabilitated kitchen and dining room benefits the ~~ entire family, but also may increase the property taxes. The home -1
that was worth $60,000 and assessed at $24,000 IS now worth
$105,000 and assessed at $42,000. The historic tax credit program
may save the home owner as much as $11,000 in property taxes
over the life of the credit.

Lower-end Residential Property
Example: A developer purchases a run-down house valued at $15,000 and assessed at $6,000. After rehabilitation, the home is worth $135,000 and assessed at $54,000. The assessment increase brings with it higher property taxes. Since the historic tax credit is transferable, a new owner may save as much as $28,000 in property taxes over the life of the credit.
                                            *
For more information about the Baltimore City Property Tax Credit for Historic Restorations and Rehabilitations contact the Commission for Historical and Architectural Preservation, 417 E. Fayette Street, Suite 1037, Baltimore, Maryland 21202, (Phone 410- 396-4866, x-4) or Fax 410-396-5662.