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Historic Restoration & Rehabilitation Tax Credit
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Baltimore City Tax Credit
for Historic Restorations and Rehabilitations
Overview: 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 city’s historic districts. Properties individually included in Baltimore City Landmark list and 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. Program keeps assessed tax of renovated or rehabilitated property at the same level as it was before start of renovation for next 10 years. Credit is for 100% of City tax assessment increase if rehabilitation of property is certified by Commission for Historical and Architectural Preservation (CHAP).
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Baltimore City’s first tax credit designed to benefit owners of historically designated property.
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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.
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Credit will benefit both homeowners and businesses.
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Goal of program is to help preserve Baltimore’s neighborhoods by encouraging restoration and rehabilitation.
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Credit is fully transferable to a new owner for remaining life of credit
Eligibility
You may be eligible for a tax credit if you complete rehabilitation of historic property located in:
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National Register Historic District
Barre Circle
Bolton Hill
Brick Hill Business & Government Center
Butcher’s Hill
Canton
Cathedral Hill
Charles Village / Abell
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
Union Square
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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
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* Also a National Register Historic District
** Section of larger National Register Historic District
How do I apply for the credit?
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First contact the Baltimore City Commission for Historical and Architectural Preservation (CHAP) at 410-396-4866, extension 4, to request an application form.
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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).
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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.
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You must invest a minimum of 25% of the full cash value of your building.
How do I receive the credit?
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CHAP will review your plans before you begin work (pre-certification) and then inspect actual work at its completion (final certification).
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Upon completion of work, CHAP forwards a copy of approved application to the State Department of Taxation.
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State Department of Taxation will advise Baltimore City’s Department of Collections regarding 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
Average Commercial Property
Example: 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 improvements, 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: Apartment owner rehabs existing units and adds 10 new units. The improvement and expansion increases 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: 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 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.
Note: 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 example.
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