Tax Credit FAQ
Historic Tax Credit Frequently Asked Questions
- How do I apply for the Historic Tax Credit?
- How do I determine if a property is eligible for the historic tax credit?
- How do I determine if my project will qualify for the tax credit?
- What do I submit when I have completed my project?
- How do I receive the Historic Tax Credit?
- My project will include an investment of $3.5 million or more; what additional materials are required?
- I am interested in other tax credits available, where can I look?
- My property is located in an Enterprise Zone, am I also eligible for the City’s Historic Tax Credit?
- How can I find out if a property is already receiving a historic tax credit?
- I own a property with a historic tax credit and want to do work to the property, should I contact CHAP?
- How long do I have to complete a rehabilitation project using the Historic (CHAP) Tax Credit?
- My property is a commercial building, can it receive the Historic Tax Credit?
The Historic Tax Credit Application is online. CHAP will not accept paper applications.
CHAP will review complete applications only. Applications that are incomplete, contain insufficient documentation, propose work that does not meet the CHAP Guidelines, or provide conflicting information will be delayed in the review and approvalprocess. CHAP staff may request additional documentation as needed. All applications should include the following:
- Photographs: Applicants must provide thorough photo documentation of the property, including photos of the all exterior elevations, the roof (if accessible), each interior room, and significant architectural details, including cornices, porches, storefronts, windows, trim, doors, staircases, railings and newel posts, fireplaces and mantels, transoms, and other unique features within the property. Photographs must be in color and must be taken in high resolution.
- Plans: If a building elevation or interior layout will be altered in any way, applicants must provide “existing” and “proposed” drawings for review.
- Scope of work: Each application must contain a detailed scope of work that thoroughly describes interior and exterior plans, proposed materials, treatments, and alterations. The scope of work should provide a comprehensive overview of the proposed project. The sample scope of work given is the recommended format but not is mandatory. SAMPLE
- Proof of Ownership: This can be in the form of a HUD1, deed, signed purchase agreement, or tax bill. If you are buying a property we recommend applying as soon as possible once you are under contract.
- Authorization to Proceed Application: ONLY REQUIRED FOR PROPERTIES IN LOCAL HISTORIC DISTRICTS, check to see if you're in a local historic district here.
- Enterprise Zone Verification Form: If your property has a commercial component, you must upload a signed copy of the Enterprise Zone Verification Form. Please see Question 8 for more information on the Enterprise Zone.
- Appraisal: All projects must have an appraisal completed as part of the initial application. Applicants must provide their own appraisal that must meet the specific requirements set by the Department of Finance. Guiding documents can be found in the Program Rules and Regulations here. The appraisal must be submitted to the City's appraiser via email and in the PDF form at [email protected]. Information on commercial appraisals can be found here.
- Review Fee: A $50 review fee will be assessed for each application. CHAP is excited to announce the deployment of an online payment system for the Historic (CHAP) Tax Credit on July 23rd, 2021. Applicants will be directed to an online payment window when submitting their tax credit application. The fee can be paid by check or credit card through the online system. It will take at least 24 hours for the payment to reflect on your application. Applicants will no longer be able to mail in paper checks for their applications.
All approvals will be issued in writing from CHAP staff and will come in the form of an email only. No other form of approval can be substituted. If a change to the project scope is necessary, applicants must submit a written or emailed amendment and receive written or emailed approval from CHAP staff prior to undertaking the change.
Your property must be historically designated as a:
- Baltimore City Landmark,
- National Register Individual Designation,
- Contributing to a Baltimore City Historic District,
- Contributing to a National Register Historic District.
You can search your property's address here to determine if it may qualify.
Additionally, the following requirements must be met:
- The project must receive preliminary approval from CHAP Staff prior to any work beginning,
- All work must meet CHAP's Design Guidelines,
- The project must result in a total investment of at least 25% of the initial full cash value of the property.
- You must invest a minimum of 25% of the full cash value of your property.
- Your application must be reviewed and approved by CHAP before you begin any work on your building if you wish to receive the tax credit. This includes interior demolition.
- Rehabilitation must follow CHAP's Design Guidelines.
Final certification submissions can be made through the ONLINE TAX CREDIT APPLICATION SYSTEM and must include the following:
- Photographs: Final certification submissions must provide thorough photo documentation of the completed rehabilitation and should correspond to the photos submitted in the original application. Photographs must be in color and must be taken in high resolution.
- Permits: Copies of all permits, including a Use & Occupancy Permit (if required) must be submitted upon completion of the project. Copies of all Authorization to Proceeds for exterior work issued by CHAP must also be submitted if the project is within a Baltimore City Historic District. A list of permits can be obtained from the Baltimore Housing Webpage
- Cost Documentation: A notarized cost documentation listing all expenses related to the rehabilitation of the project must be submitted at the end of the project. This documentation must demonstrate that at least 25% of the full cash value of the property was invested during the course of the project and that the total amount has been paid in full. Estimates of any kind cannot be accepted. Cost documentation must include material and labor costs and can also include architect, engineering, and design fees. The cost documentation cannot include property acquisition costs, utility bills, property tax bills, or other holding costs.
- Appraisal: All projects must have an appraisal completed as part of the final submission. Applicants must provide their own appraisal that must meet the specific requirements set by the Department of Finance. Guiding documents can be found in the Program Rules and Regulations here. The appraisal must be submitted to the City's appraiser via email and in the PEF form at [email protected]. Information on commercial appraisals can be found here.
Go directly to the “DOCUMENTS/UPLOADS” tab to upload your final certification materials. Once you have uploaded all the required materials, go to the "SIGNATURE" tab, and select “SUBMIT FINAL.”
- A property must receive final certification from CHAP.
- The Historic Tax Credit will appear on the next issued tax bill as a "Special Credit."
- For more information, you can contact the Department of Finance.
- The Department of Finance is responsible for calculating the credit and all questions regarding the calculation of the credit should be addressed to them.
6. I have a large project where I will be investing at least $3.5 million dollars; what additional materials are required?
For projects over $3.5 million dollars in investment, the Baltimore City Department of Finance must also review and approve the project. Please contact CHAP Staff for more information and to discuss the additional forms required for the Department of Finance review.
- The Department of Finance has a list of all property tax credits in Baltimore City. The Historic Tax Credit cannot be combined with any other City credit.
- The Maryland Historical Trust offers the Maryland Heritage Structure Rehabilitation Tax Credit Program, a group of three credit types for which historic properties are eligible. These credits can be combined with the City’s Historic Tax Credit.
- The National Park Service administers the Federal Historic Preservation Tax Incentives Program. This credit can be combined with the City’s Historic Tax credit.
8. My property is located in an Enterprise Zone, am I also eligible for the City’s Historic Tax Credit?
If your property is located within an Enterprise Zone and your project includes commercial property, you must submit an application to the BDC if you are interested in pursuing the Historic Tax Credit as well. The Historic Tax Credit is applied to areas of a project that are not eligible for the Enterprise Zone Credit.
If a property has been certified for the historic tax credit, a letter was issued by CHAP. You can obtain this letter by contacting CHAP at [email protected]. A seller may be able to provide a copy of the letter, but it is recommended that you confirm the property has been certified by the CHAP staff.
10. I own a property with a historic tax credit and want to do work to the property, should I contact CHAP?
If you are planning to do additional work to your property and you are currently receiving the historic tax credit, you should reach out to CHAP to get approval for the work. Please email your property address, information, and photos of the work you are planning, and any additional information that will help the CHAP staff determine that your project meets the CHAP Design Guidelines. You can email this information to [email protected]. Failure to obtain approval for additional work may jeopardize your ability to continue receiving the tax credit.
- Projects with rehabilitation costs up to $3.5 million have two years to complete the project. At the end of the two years, applicants will be notified of the upcoming expiration and will have the opportunity to request a one-time, two-year extension via the online system.
- Projects with rehbailitation costs over $3.5 million have three years to complete the project. At the end of the three years, applicants will be notified of the upcoming expiration and will have the opportunity to request a one-time, three-year extension via the online system.
All notifications are sent via email to the address used on the specific tax credit application for that property in the online system. Please be sure to use an email account you access regularly.
Yes! Use is not a factor in eligibility for the Historic Tax Credit. However, if the property has no residential component and is in an Enterprise Zone then the property can only receive the Historic Tax Credit if there is an investment less than $3.5 million. Additionally, all commercial buildings or properties with four or more rental units must provide their own appraisals that meet the requirements set by the Department of Finance. Guiding documents for the appraisal can be found here. More information is available by contacting the Department of Finance.