Home Buying in Baltimore>Question Details

vchidi, Other/Just Looking in Baltimore, MD

Can anyone explain the "tax credit" for purchasing a historic district row house in Baltimore?

Asked by vchidi, Baltimore, MD Sun Jul 6, 2008

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There are several historic tax credits for Buyers purchasing in Baltimore. The most common historic tax credit in Baltimore is the CHAP credit. This credit offers a city tax credit that is equivelant to the difference between the preconstruction assessed value (at the time application was made and preliminary approval was given) and whatever the new assessed value (after improvements). The value of this credit can change (float) year to year to reflect any increases in the assessed value of the subject property. It is a ten year credit (from the time of the approval) and it can be transferred an unlimited number of times within the ten year period. The credit is only available in certain neighborhoods, and is very difficult to obtain if you do not make application prior to completing your improvements (the guidelines are stringent and the average contractor / homeowner would most likely unknowingly do something to disqualify the credit). It is rarely seen retroactively. I would not assume that you could purchase the average house and then apply for the credit. Be careful, many area real estate agents do not understand this credit and will not exsplain it properly. To qualify for the credit, the cost of the improvements must be equivelant to 25% of the properties preconstruction assessed value. I have sold over 40 properties with this credit and my personal residence has this tax credit. It is a great deal. I work with two of the largest tax credit Builders in the Canton / Fells Point area. Many Buyers are taking advantage of this credit.

The second common credit is The Heritage Preservation Tax Credit Program which is offered by the Maryland Historical Trust. This credit offers the homeowner Maryland income tax credits equal to 20% of the qualified costs of the rehab of a qualified “certified heritage structure.” This credit will also only be available in certain areas. The homeowner must invest at least $5,000 within a 24 month period. The total credit for an individual property is capped at $50,000 for a single property. The credit received is offset by any tax liabilities for the year the credit is submitted. i.e. - If you owe $5,000 to the state and your credit is worth $40,000, the state will send you a check back for $35,000. Hope this helps. Now the challenge is finding a property. Good luck
1 vote Thank Flag Link Wed Aug 6, 2008
I realize this question was from 2008, things have changed since then. Here is a good explanation of it:
http://crabbyhomes.com/2014/01/baltimore-city-chap-tax-credi…
0 votes Thank Flag Link Thu Apr 10, 2014
Maryand State and Baltimore City both have tax credits for the historic rehob of homes. Here are the sites
To find out whether a property is eligible for tax credits: Baltimore Coty's IMAP Program
http://maps.baltimorecity.gov/imap
baltimore Commission for Historical & Architectural Preservation 410.396.4866

City Tax Credit Questions: Baltimore Commission For Historical and Architectural Preservation
http://www.baltimorecity.gov/government/historic/index.html
410.396.4866

State Tax Credit Questions: Maryland Historical Trust
http://www.marylandhistoricaltrust.net
410.514.7639

Federal Tax Credit Questions: Federal Park Service - Heritage Preservation Services
http://www.cr.nps.gov/hps/
202.354.2031

http://www.baltimoreheritage.org
410.332.9992

We have sold many home to investors in Baltimore. Feel free to contact us.
0 votes Thank Flag Link Wed Jul 16, 2008
You really should speak with a local CPA in that area.
0 votes Thank Flag Link Sun Jul 6, 2008
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