Baltimore City Commission for Historical & Architectural Preservation (CHAP) - Tax Incentives

A tax incentive for Historic Landmarks and Districts

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. (Approximately 54,000 properties in total). 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 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 transferrable to a new owner for the remaining life of the 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.

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 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.

Apartment Property
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.

Hotel Property
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.

Further Information

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 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: 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: 410-514-7600).

For 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-5).