Historic Rehabilitation Tax Credit

Homeowners have the opportunity to earn a property tax credit equal to 20 percent of Qualified Rehabilitation Expenditures (QREs). The eligible expenses must be at least $1,000 to qualify. The approved credit is a fixed amount of money from which the owner can draw, over a period of up to 10 years, to reduce the annual County property tax payable on the property.

The credit applies against the County real property tax bill. Any received credits will start in the next tax year after the year in which the work “or any part” is completed and is certified as complying with the County standards. Any unused part of the total credit may be carried over up to 10 subsequent tax years (or until the credit runs out, whatever comes first). Any received tax credits are fully transferable to a new owner of the property for the remaining life of the credit. There is no limit on the number of tax credits received.

The credit can terminate if the property is altered (before the end of the 10 years) so that it no longer complies with the rehabilitation standards by which the property obtained eligibility or if the property is removed from the Landmarks List.

Property owners for commercial historic properties, have the opportunity to earn a property tax credit based on the property’s assessed value, pre- and post-rehabilitation. The credit is equal to the difference between the assessed value before the rehabilitation work began and the increase in assessment that happened as a result of the rehabilitation work. The credit functions essentially as a cap on the assessment for a 10-year period. Meaning that property taxes will not go up because of the increased value, which resulted from the rehabilitation work.

In order to generate a reassessment the work has to be significant—generally in excess of $50,000. The credit may not, however, exceed the actual amount of the tax levied on the property in any tax year.

The credit continues at the same amount each year for a total of 10 subsequent tax years. The credit is fully transferable for the remaining life of the credit to any new owner of the property.

Please note that the granting of a tax credit does not affect or prevent changes in assessment (and the property taxes consequently due) attributable to any other work on the property, or to the State's triennial review and reassessment program attributable to an overall increase in property values.

The credit functions essentially as a cap on the assessment of the portion of the property that was subject to the rehabilitation work. It prevents the owner from being penalized through the property tax for a 10-year period, for having done the work and fulfilled the law’s intention that historic buildings should be rehabilitated to continue in productive use.

The tax credit may be used for projects that return the historic structure “to a state of utility through repair or alteration that allows for the efficient use of the structure, while preserving those portions and features of the structure and its site and environment that are historically, architecturally or culturally significant."

Examples of eligible projects include, but are not limited to:

• Basement waterproofing
• Chimney repair and lining
• Exterior Painting
• Interior plaster repair
• Masonry repointing
• New storm windows (interior and exterior)
• New wells
• Original wood floor refinishing
• Plumbing, electrical and mechanical systems
• Repair of historic outbuildings
• Roof repair and replacement
• Structural repairs
• Tool/equipment rental
• Window restoration

Examples of ineligible projects include, but are not limited to:

• Carpeting over historic flooring
• Consulting fees
• Curtains, blinds, rugs or other interior décor
• Equipment/tool purchases
• Landscaping (e.g. flowerbeds, tree planting, gardens)
• New appliances, fixtures, kitchen cabinets, etc.
• New construction
• Non-historic outbuildings
• Pest control, chimney cleaning, drain cleaning, etc.
• Projects that are primarily remodeling in nature (e.g. new kitchens or bathrooms)
• Sidewalks, patios, driveways
• Work to non-historic additions (more recent additions that haven’t gained significance over time)

Parts 1 and 2 Forms can be submitted separately or together.

1. Part 1—Certifies that a building is eligible for the program. (Properties that already have an approved Part 1 application, do not need to complete a new form. Just submit a copy of the previously approved Part 1 with your Part 2 application, or contact staff to determine if we have it on file.)
2. Part 2—Certifies that the proposed project meets the Secretary of Interior's Standards for Rehabilitation & and Baltimore County’s Historic Design Guidelines.
3. Part 3—Certifies that the completed project meets the Standards for Rehabilitation and the expenditures claimed are eligible for the tax credit

Parts 1 and 2 Forms can be submitted separately or together.

1. Part 1—Certifies that a building is eligible for the program. (Properties that already have an approved Part 1 application, do not need to complete a new form. Just submit a copy of the previously approved Part 1 with your Part 2 application, or contact Staff to find out if we have it on file.)
2. Part 2—Certifies that the proposed project meets the Secretary of Interior's Standards for Rehabilitation & and Baltimore County’s Historic Design Guidelines
3. Part 3—Certifies that the completed project meets the Standards for Rehabilitation and the expenditures claimed are eligible for the tax credit
   Required Documents: Itemized Expense Spreadsheet