Tax Credits for Commercial Historical Building Restoration in Baltimore

One of the many benefits of commercial historical building restoration in Baltimore is the potential for receiving tax credits for this work. In an effort to provide an incentive to maintain and preserve the city’s many historic districts, Baltimore offers tax credits for restoration of commercial historical buildings. Tax credits are also available on the state and federal level. All three are subject to qualification, meaning the building must be in a qualifying historic district, and the restoration must follow certain historic guidelines. If the building does qualify, these tax credits offer a substantial tax break to the owner making the investment.

Tax Credits for Commercial Historical Building Restoration in Baltimore

Baltimore City Tax Credits

The Baltimore City Commission for Historical and Architectural Preservation (CHAP) offers a tax credit that defers taxes on the value of the restored building for 10 years. Essentially, once the restorations are complete, the property owner will pay taxes on the pre-restoration value of the building for 10 years. This example from their website demonstrates how this tax credit can benefit commercial property owners in Baltimore:

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.

Maryland State Tax Credits

The state of Maryland offers tax credits to competitive commercial properties and small commercial properties through the Maryland Historical Trust. The small commercial credit is designed for “modest rehabilitation projects that have historically struggled to compete for the large-scale commercial awards.” Large-scale awards can be obtained through the competitive commercial credit. The takeaway for both credits is a “one-time state income tax credit equal to 20 percent of qualified rehabilitation expenditures.” Both credits can be used in combination with local and federal tax credits.

Federal Tax Credits

Federal tax credits for commercial historic building restoration are managed by the National Park Service. Similarly to Maryland state tax credits, the National Park Service offers a one-time 20% credit on qualified expenditures.

baltimore historic restoration tax credit

About Consolidated Coatings Inc.

Consolidated Coatings is a full service building restoration contractor operating in Maryland, Virginia, and Washington, D.C. Since 1979, we’ve provided professional restoration of commercial, industrial, and historic buildings across a range of disciplines. These include masonry restoration, concrete restoration, decorative concrete, industrial and floor coatings, EIFS, and waterproofing. Follow us on our blog for weekly posts on industry-related topics. If you have any questions, please contact us at 410-574-6504.

This entry was posted on Thursday, October 16th, 2014 at 6:46 pm.