If you own a commercial building and are considering doing restoration work, one important factor to consider is the potential for receiving tax credits towards the restoration. Learn about the tax incentives available for historic preservation in Baltimore in our blog.
Baltimore’s Tax Incentive Program for Historic Preservation
The official name for the program is the Baltimore City Tax Credit for Historic Rehabilitations and Restorations, and it is administered by the Baltimore City Commission for Historical and Architectural Preservation (CHAP). From the CHAP website:
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 credit is computed once and lasts for 10-years. Essentially, it allows the beneficiary of the credit to pay property taxes on the pre-restoration value of the building for 10 years following the completion of the restoration work.
For projects with construction costs less than $3.5 million is 100%. For projects with construction costs greater than $3.5 million, the credit is 80% in the first 5 taxable years, and then declines by ten percentage points thereaffter.
The credit is eligible for all interior and exterior renovations.
There are a number of criteria for eligibility for the CHAP tax credit.
- Property must be historically designated either as a Baltimore City Landmark, National Register individual designation, or contribute to a Baltimore City or National Register Historic District.
- “You must invest a minimum of 25% of the full cash value of your property (Land and Improvements). The full cash value is determined by an appraisal of the property before the commencement of eligible improvements made by an appraiser selected by the City and licensed by the State of Maryland.”
- The work must follow historic preservation guidelines set by CHAP.
- You must send in an application to be reviewed and approved by CHAP before the work begins.
Visit the CHAP website for more information about historic building preservation in Baltimore. Look for our next blog on tax credits available at the state and federal levels.
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!