Baltimore is a city full of gorgeous architecture that has been allowed to fall into disrepair. The city government has instituted a program of comprehensive tax credits to incentivize the rehabilitation of historic buildings within the city. The program has generated over half a billion dollars of investment in Baltimore city and can save thousands for owners of designated properties. Learn more about the program, available tax credits, and how you can take advantage of them for your historic renovation project.
Learn more about Baltimore’s historic tax credit program.
Historic Rehabilitation and Renovation Tax Credits Available in Baltimore
In order to encourage developers to invest in Baltimore properties, the Property Tax Credit for Historic Restorations and Rehabalitiations was instituted. The program provides a 10 year tax credit for all interior and exterior renovations of historic properties.
The property tax credit is calculated once and then used for the life of the 10-year credit. The credit for projects with construction costs under $3.5 million is 100% while projects over $3.5 million is 80% for the first 5 taxable years, declining by 10 percentage points after year 5.
In order to qualify, the property must be historically designated as a landmark, a National register individual designation, or contributing to either a Baltimore City or National Register Historic District. Owners must also invest at least 25% of the property’s value, the application must be reviewed before any work is begun, and rehabilitation work must follow CHAP’s historic preservation guidelines. To receive the credit, your property must obtain CHAP’s final certification. The credit will appear on your tax bill as a “special credit.”
The historic tax credit application is only accepted online. You can begin the application process by filling out your application here. CHAP no longer accepts paper applications.
Baltimorecity.gov offers this example of potential savings: “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.”
About Mahogany, Inc.
Mahogany, Inc. is a general contractor specializing in quality construction for projects across a wide range of industries. Located in southwest Baltimore, we employ 100 persons, and are one of the largest minority owned businesses in the state of Maryland. Make sure to check back with our blog every week for the latest industry related information. For more information, you can contact us at 410.727.0334, or email us. We look forward to hearing from you!