Property Tax Credit for Historic
Rehabilitation
Baltimore County
law authorizes the Director of Budget & Finance to grant a partial
credit "against the county real property tax imposed on eligible
improvements to historic properties." The details of the law
are specified in Section 33-43 of the Baltimore County Code (included
below as Appendix A).
The following questions and answers are intended to help interested persons
become familiar enough with the program to focus their inquiries when
contacting the Office of Planning for further information in regard to
specific historic properties.
Which historic properties are eligible for the County tax credit?
The Baltimore County tax credit is available only to properties which
are "residentially zoned" – i.e., zoned DR, RC, R-O-A,
or RAE on the official zoning map. In addition , the property (or
structure) must be either:
1. On the Baltimore County Final Landmarks List, or
2. Individually listed on the National Register of Historic Places,
or
3. Located within a National Register Historic District or one of
the historic districts enacted by the Baltimore County Council. Within
historic districts, eligibility is generally available only to "contributing"
properties, i.e., those which are historically or architecturally significant
or are architecturally compatible with the other historic structures in
the district.
How can I learn if my property is already eligible?
The Baltimore County Landmarks List is posted elsewhere in this web-site,
as is the list of the County-enacted historic districts. The list of National
Register properties and districts is available at the web sites of the
National Park Service (www.nr.nps.gov/nrloc1.htm)
and the Maryland Historical Trust (www.MarylandHistoricalTrust.net).
Maps showing the location of individually-eligible properties and the
boundaries of the historic districts are available for reference at the
Office of Planning.
What kinds of improvements to historic properties are eligible in
the County program?
Rehabilitation is broadly defined as "the process of returning a
property to a state of utility, through repair or alteration, which makes
possible an efficient contemporary use while preserving those portions
and features of the property which are significant to its historic, architectural,
and cultural values."
Eligibility for the Baltimore County rehabilitation tax credit has two
components:
1. The improvements must be "significant," meaning that
the total cost of the improvements must equal at least 25% of the property's
"full cash value" as listed, before the rehabilitation, in the
Maryland Department of Assessment & Taxation's records.
2. The improvements must be "determined by the [Baltimore County]
Landmarks Preservation Commission to be compatible with county historic
preservation standards." The Commission uses The Secretary
of the Interior's Standards for the Treatment of Historic Properties.
The ten standards applicable to rehabilitation projects are included
below as Appendix B . Detailed, illustrated guidance on the standards
(and much additional useful information) is available on the National
Park Service web-site (www2.cr.nps.gov/tps/tax/).
Owners
contemplating significant changes to their property should consultant
with a preservation architect early in their project. There is a list
of qualified preservation architects on the Maryland Historic Trust's
website.
Can the same property receive both the County tax credit and a credit
or refund through the Maryland Rehabilitation Tax Credit program?
Yes, if the rehabilitation project meets the eligibility requirements
of each program (which are generally the same). It is especially
important to contact the Office of Planning as early as possible, to coordinate
the separate approvals needed for each program. The Maryland Historical
Trust's web-site provides full information, and application forms, for
the State program (www.MarylandHistoricalTrust.net).
What is the amount of the County tax credit?
The Director of Budget & Finance may approve a credit that "may
not exceed the difference between:
1.
The property tax that … would be payable after completion
of the eligible improvements; and
2. The property tax that would be payable if the eligible improvements
[had not been] made."
In effect, the county tax credit amounts to a property tax "freeze"
on the portion of the property's value that is directly attributable to
the approved "eligible improvements." Its basic purpose
is encourage rehabilitation in accordance with historic preservation standards
by preventing the owner from being penalized, through higher taxes, for
having
done the work properly.
What is the effect of the County tax credit?
The tax credit runs with the property, at a constant dollar amount each
year, for a period of ten years. Any remaining life of the credit is fully
transferable to a new owner.
The tax credit does terminate, however, if the property is altered (before
the end of the ten years) so that it no longer meets the historic preservation
standards by which the rehabilitation work was approved.
Please note that the credit relates only to the increase in the property's
value attributed to the rehabilitation improvements. The credit
does not affect or prevent changes in assessment (and taxes consequently
due) attributable to other work on the property or to the State's triennial
review and reassessment program.
What is the procedure for obtaining the County tax credit?
There are essentially four steps. The first is optional but highly recommended.
The other three deal with the mandatory elements in the County law.
1. Persons intending to seek the county tax credit are strongly
advised to schedule an informal meeting with County historic preservation
staff in the Office of Planning as early as possible in preparing the
project's details. Staff will advise on important aspects, such
as:
• Work elements that may be regarded as inappropriate or ineligible based on the County's interpretation of the Secretary's Standards and the County law
• Obtaining approval from the LPC for the issuance of the relevant County building permit(s)
• Coordination for review and approval from the MHT (if the Maryland Rehabilitation Tax Credit program will also be used)
•
Procedures and records for obtaining County approvals at the end of the
project
2. After the project is completed, the State (Maryland Department
of Assessment
and Taxation) will issue "a notice of assessment … relating
to the assessment of the eligible improvements …." To
obtain County approval of the tax credit, application must be made to
the County " within 45 days of the issuance of the notice of assessment." The
application is made on a form provided by the Office of Budget and Finance
(and must be accompanied by the information specified on the form).
3. The step which ordinarily will trigger the review and issuance of the assessment notice by the State would be the County's issuance of a "Use and Occupancy Permit" after the project is completed. Upon receipt of that permit, the owner should promptly prepare the tax credit application package so that it can be submitted as soon as the assessment notice is received. County historic preservation staff should also be contacted so that the matter can be scheduled for timely review by the LPC, which must make a recommendation to the Director of Budget and Finance. Staff will also advise on any additional material that may be helpful for the LPC's review.
4.
The application package must be submitted to the Office of Budget
and Finance, which will forward the application for review by the LPC.
The Director of Budget and Finance is required "to grant or deny
the application … within thirty days of his receipt of the taxpayer's
application."
Who can tell me more about the County program?
Please contact the historic preservation staff at:
Office
of Planning
County Courts Building, Room 406
401 Bosley Avenue
Towson, MD 21204
(410-887-3495)
Please
ask the receptionist to mail to you a copy of Section 33-43 of the County
Code as well as a copy of the application.
* * * * * * * * * * * *
Appendix A
Baltimore County Code, 1988, as amended
Section 33-43 Property Tax Credit for Historic Restorations and Rehabilitations
(a) Definitions. In this section, the following words have
the meanings indicated:
Eligible improvements means significant
improvements to, or restoration or rehabilitation of, historic, residentially
zoned properties.
Significant improvements means a rehabilitation,
the total cost of which equals or exceeds twenty-five (25) percent of
a property’s full cash value prior to rehabilitation as reflected
in the assessment records of the state department of assessments and taxation
for the county.
(b) In accordance with the provisions of the Ann. Code of Md., Tax-Property article, § 9-204.1, a tax credit is granted against the county real property tax imposed on eligible improvements to historic, residentially zoned properties.
(c) A property tax credit granted under this section may not exceed the difference between:
(1) The property tax that, but for the tax credit, would be payable after the completion of the eligible improvements: and
(2) The property tax that would be payable if the eligible improvements were not made.
(d) A property tax credit granted under this section shall:
(1)
Be subject to eligibility requirements applicable to credits authorized
under the Ann. Code of Md., Tax-Property article, § 9-204;
(2) Be for a period of ten (10) years for each property;
(3) Apply to eligible improvements which are:
a. Located within the boundaries
of:
1. A property listed individually on the national register of historic
places, or a national register of historic or landmark district; or
2. A property or district designated as a historic property or district
under county law; and
b. Determined by the landmarks preservation commission to be compatible
with county historic preservation standards;
(4) Be fully transferable to a new owner for the remaining life
of the credit; and
(5) Terminate if the property is converted so as not to meet established
historic preservation standards during the credit period.
(e) (1) To receive a tax credit under this section, a taxpayer
shall make application under oath to the director of budget and finance
on such forms as may be specified by the director and the executive secretary
of the county landmarks preservation commission. The application
shall be filed within forty-five (45) days of the issuance of a notice
of assessment by the state department of assessments and taxation for
the county relating to the assessment of the eligible improvements for
which a tax credit is sought under this section.
(2) The director, based
upon the recommendation of the landmarks preservation commission, shall
grant or deny the application for tax credit within thirty (30) days of
his receipt of the taxpayer’s application, and shall notify the
applicant of his decision at the address set forth in the application.
Applications not granted by the director within thirty (30) days
of the director’s receipt of an application for tax credit under
this section shall be deemed denied.
(3) A taxpayer
whose application for tax credit under this section is denied may appeal
the director’s decision to the county administrative officer within
fifteen (15) days of the date of the director’s denial by written
statement of the action complained of and the reasons therefor. The
county administrative officer, or his designee, may reverse, affirm, or
modify the director’s decision, within fifteen (15) days of his
receipt of a timely appeal, and shall notify both the director and the
applicant of the decision. If the county administrative officer
fails to act upon an appeal within fifteen (15) days of his receipt thereof,
the decision of the director shall be considered affirmed.
(Bill No. 129-97, §1, 1-3-98)
Editor’s note - Section 3 of Bill No. 129-97, effective Jan. 3,
1998, states that the “the tax credit provided herein shall no longer
be available after the expiration of ten (10) years following the effective
date of this Act. Properties shall be eligible for the Property
Tax Credit under this Act if an application therefor has been filed with
the Baltimore County Office of Finance, in accordance with the provisions
of this Act, within ten (10) years following the effective date of this
Act.”
* * * * * * * * * * * *
Appendix B
The Secretary of the Interior's Standards
The Secretary of the Interior's Standards for Rehabilitation are ten basic
principles created to help preserve the distinctive character of a historic
building and its site, while allowing for reasonable change to meet new
needs. The majority of the work completed on private residences is classified
as a historic "Rehabilitation" rather than a "restoration."
A property shall be used for its historic purpose or be placed in a new
use that requires minimal change to the defining characteristics of the
building and its site and environment.
The historic character of a property shall be retained and preserved.
The removal of historic materials or alteration of features and spaces
that characterize a property shall be avoided.
Each property shall be recognized as a physical record of its time, place,
and use. Changes that create a false sense of historical development,
such as adding conjectural features or architectural elements from other
buildings, shall not be undertaken.
4.
Most properties change over time; those changes that have acquired historic
significance in their own right shall be retained and preserved.
5. Distinctive features, finishes, and construction techniques or examples
of craftsmanship that characterize a historic property shall be preserved.
6. Deteriorated historic features shall be repaired rather than replaced.
Where the severity of deterioration requires replacement of a distinctive
feature, the new feature shall match the old in design, color, texture,
and other visual qualities and, where possible, materials. Replacement
of missing features shall be substantiated by documentary, physical, or
pictorial evidence.
7. Chemical or physical treatments, such as sandblasting, that cause damage
to historic materials shall not be used. The surface cleaning of structures,
if appropriate, shall be undertaken using the gentlest means possible.
8. Significant archeological resources affected by a project shall be
protected and preserved. If such resources must be disturbed, mitigation
measures shall be undertaken.
9. New additions, exterior alterations, or related new construction
shall not destroy historic materials that characterize the property. The
new work shall be differentiated from the old and shall be compatible
with the massing, size, scale, and architectural features to protect the
historic integrity of the property and its environment.
10. New additions and adjacent or related new construction shall be undertaken
in such a manner that if removed in the future, the essential form and
integrity of the historic property and its environment would be impaired.
Be a part of saving our heritage in Baltimore County!