Monday, June 15, 2015

Commercial Historical Tax Credits Available

Owners of historic commercial properties can now submit an application for a state income tax credit for renovating historic structures in Maryland. Fiscal year 2016 applications opened last week for the Sustainable Communities Competitive Commercial Tax Credit program, administered by the Maryland Historical Trust.  Applications are due August 31, 2015.  In addition, there are tax credits available at the City, County, and Federal level to help transform historical properties into neighborhoods where people want to live, work and play.

Owners of income-producing properties have the opportunity to earn a state income tax credit (capped at $3 million) that is equal to 20 percent of eligible rehabilitation expenses for substantial rehabilitation projects. Substantial rehabilitation projects are defined as projects with eligible expenses that exceed the greater of the adjusted basis value of the structure or $25,000. An additional 5 percent credit is available for projects that achieve LEED Gold Certification or equivalent. Applications are rated and ranked by the Maryland Historical Trust and compete for a total of $9 million in tax credit awards. To view a downloadable brochure on this program, please click here.

Locally, Frederick County provides a 5-year decreasing credit property tax credit for increases in assessments for properties in the historic districts of the City of Frederick, the Town of New Market, or listed in the Frederick County Register of Historic Places, provided that the historic preservation commissions in those jurisdictions have reviewed and approved the work which results in the increased assessment. To review the application for the Frederick County Historic District Tax Credit Program, please click here.

The City of Frederick also has a Historic Preservation Property Tax Credit available for the 40 blocks of Downtown Frederick.

The Federal Historic Preservation Tax Incentive is administered by the National Park Service and offers a 20% federal income tax credit, based on the renovation of a certifed historic structure.

These programs are designed to encourage the redevelopment and reuse of historic buildings which help create jobs, contribute towards increased property values and encourage reinvestment in our neighborhoods.