What are historic tax credits?
Historic tax credits are financial incentives for residential or commercial rehabilitation projects that require property-owners to follow certain preservation standards. Baltimore City has nearly 70 neighborhoods that are designated as historic districts containing over 50,000 residential and commercial buildings. Thousands of home-owners and business owners across Baltimore City have used city, state and federal historic tax credits for rehabilitation projects on everything from small rowhouses in Seton Hill to large developments like the American Can Company building in Canton.
Am I eligible for historic tax credits?
Eligibility requirements for properties and projects vary between the city, state and federal historic tax credit programs. In most cases, your property must be an individual landmark or a “contributing resource” within a historic district designated by CHAP or the National Register. Learn more about historic districts.
When should I apply?
In all cases, you must apply and receive approval before starting work on your project. Projects that have already been started or completed before receiving approval are not eligible for historic tax credits. This application process will determine if your proposed project meets the CHAP design guidelines or the Secretary of Interior’s Standards for Rehabilitation.
Historic Tax Credit Programs
There are four different historic tax credit programs available for homeowners, small commercial property owners, and larger commercial property owners in Baltimore. A variety of other programs are available that may be combined with historic tax credits or other historic rehabilitation projects including energy efficiency incentives for residential properties or commercial properties. Please also take a look at our funding guide for historic preservation projects for information on grant and loan programs.
Baltimore City Historic Tax Credit
The Baltimore City Commission on Historic and Architectural Preservation administers a 10-year comprehensive property tax credit granted on the increased assessment directly resulting from qualifying improvements to historic properties. Both homeowners and commercial properties are eligible for this tax credit.
Maryland Homeowner Historic Tax Credit
The Maryland Historical Trust administers a state income tax credit for homeowners equal to 20% of qualified rehabilitation expenditures. This tax credit may be combined with the Baltimore historic tax credit but MHT review is independent of local review and may not be waived or substituted for local approval. The credit is capped at $50,000 in a 24-month period.
Maryland Small Commercial Historic Tax Credit
The Maryland Historical Trust administers a state income tax credit for commercial properties equal to 20% of qualified rehabilitation expenditures. Credits are capped at $50,000 in a 24 month period. This is a new program created to help fund modest rehabilitation projects that have struggled to compete for the large-scale commercial awards in the past. The state small commercial tax credit may be used with federal and local historic tax credits. Federal applications are reviewed by MHT in coordination with the National Park Service and should be submitted at the same time.
Maryland Competitive Commercial Tax Credit
The Maryland Historical Trust administers a competitive program for income-producing properties to receive a state income tax credit (up to $3 million) equal to 20% of eligible rehabilitation expenses for rehabilitation projects with eligible expenses that exceed the total cash value of the building or $25,000 (whichever is greater).
Federal Historic Tax Credit
The National Park Service administers a 20% income tax credit for the rehabilitation of historic income-producing buildings. A 10% tax credit is available for the rehabilitation of non-historic buildings constructed before 1936.
Who uses historic tax credits?
Homeowners often use state historic tax credits for significant maintenance or rehabilitation projects. Larger projects are also eligible for the city tax credit. Typical work includes interior or exterior painting, repairing deteriorating porches or repointing brickwork.
Business owners or small developers should take a close look at the city historic tax credits and the state small commercial historic tax credit. Common projects include restoring storefront windows and upgrading HVAC or electrical systems.
Large scale developers use the city and federal historic tax credit. The state commercial tax program for larger project is available on a competitive basis. Typical projects include complete rowhouse rehabilitation projects or the adaptive reuse of a larger building like a school or factory.