Historical & Architectural Preservation / Historic Tax Credit
Baltimore City Tax Credit for Historic Rehabilitations and Restorations
Baltimore City is offering a property tax incentive program that will save thousands of dollars for owners of landmark designated properties and properties located in 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 and national districts will benefit. To date, the tax credit has generated over $560,000,000 of investment in Baltimore’s Historic landmarks and districts.
The program, called the Property Tax Credit for Historic Restorations and Rehabilitations, is a 10 year, comprehensive tax credit 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 credit is granted on the increased assessment directly resulting from qualifying improvements. The assessment subject to the tax credit is computed once and used for the entire life of the credit. The credit for projects with construction costs less than $3.5 million is 100%, and for projects with construction costs more than $3.5 million is 80% in the first five taxable years and declines by ten percentage points thereafter.
• 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 among the most comprehensive in the country.
• Credit benefits both homeowners and businesses.
• Goal of the program is to help preserve Baltimore's neighborhoods by encouraging restoration and rehabilitation.
• Credit is fully transferrable to a new owner for the remaining life of the credit.
- How do I apply for the Historic Tax Credit?
How do I determine if a property is eligible for the historic tax credit?
- You can pick up an application from the Baltimore City Commission for Historical and Architectural Preservation (CHAP) in our office or download the application.
- Your property must be historically designated as a:
How do I determine if my project will qualify for the tax credit?
- Baltimore City Landmark,
- National Register individual designation,
- Contributing to either a Baltimore City or National Register Historic District.
What do I submit with my initial, completed application?
- You must invest a minimum of 25% of the full cash value of your property (Land and Improvements, as listed in SDAT).
- Your application must be reviewed and approved by CHAP before you begin any work on your building, if you wish to receive the tax credit. This includes interior demolition.
- Rehabilitation must follow CHAP's Historic Preservation Guidelines.
What do I submit when I have completed my project?
- Printed, color photographs of the property in its current (pre-rehab) condition, both interior and exterior photos should be submitted
- A $50 check made to the Director of Finance, Baltimore City (project review fee)
- Any plans, elevations, cut sheets or relevant materials
- If your property is located within a Baltimore City Historic District, a Notice to Proceed Application for the exterior work.
How do I receive the Historic Tax Credit?
- NEW! Final Certification Checklist
- Printed, color photographs of the completed project, both interior and exterior photos should be submitted
- Copies of all permits obtained during the project, including a Use & Occupancy permit if required. A list of permits can be obtained from the Baltimore Housing webpage.
- A detailed cost documentation that shows the total amount that was invested and that the total has been paid in full.
I have a large project where I will be investing at least $3.5 million dollars; what additional materials are required?
- CHAP will review your plans before you begin work and then review the actual work after its completion.
- Upon completion of the work, CHAP sends 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.
- The Historic Tax Credit will appear on the tax bill as a “Special Credit.”
I am interested in other tax credits available, where can I look?
My property is located in an Enterprise Zone, am I also eligible for the City’s Historic Tax Credit?
- For projects over $3.5 million dollars in investment, the Baltimore City Department of Finance must also review and approve the project. Please contact CHAP Staff for the additional forms required for the Department of Finance review.
- If your property is located within an Enterprise Zone, you must submit an application to the BDC if you are interested in pursuing the Historic Tax Credit as well. The Historic Tax Credit is applied to areas of a project that are not eligible for the Enterprise Zone Credit.
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 purposes. Actual circumstances of assessments may vary from the example.
Example: An owner of a two-story building, who runs a business on the ground floor and resides on the top floor, decides to undertake substantial improvements. After the improvements, the property value increases from $283,000 to $458,000. The historic tax credit program saves the property owner as much as $40,000 in property taxes over the life of the credit.
Example: An apartment owner rehabs existing units and adds ten new units. The improvement and expansion increases the property value from $430,000 to $930,000. The historic tax credit may save the property owner as much as $117,000 in property taxes over the life of the credit.
Example: A 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 historic tax credit program may save the property owner as much as $280,000 in property taxes over the life of the credit.
Owner-Occupied Residential Property
Example: A rehabilitated kitchen and dining room benefits the entire family, but may also increase the property taxes. The home that was worth $60,000 is now worth $105,000. The home owner may save as much as $11,000 in property taxes over the life of the credit.
Residential Investment Property
Example: A developer purchases a vacant house valued at $15,000. After rehabilitation, the home is worth $135,000. 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 further 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, 8th Floor, Baltimore, Maryland 21202, Phone (410) 396-4866
For information about the City and State rehabilitation loans contact the Home Ownership Institute, Department of Housing and Community Development, Suite 1125, 417 E. Fayette Street, Baltimore, Maryland 21202 Phone: (410) 396-3124.
For information about the State and Federal preservation loans, grants, and tax incentives, contact the Maryland Historical Trust, Division of Historical and Cultural Programs, Third Floor, Department of Housing and Community Development, 100 Community Place, Crownsville, Maryland 21032-2032 Phone: (410) 514-7628.