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Maryland Historic Tax Credit Program
This program provides the greatest benefit to Historic District owners as it may include exterior and interior work, such as modernization of kitchens and bathrooms, and utility upgrades. Owner-occupied and income-producing properties may qualify for this program. Applications for owner-occupied properties are reviewed on a rolling basis. Applications for income-producing properties are reviewed on a yearly basis, with a single statewide deadline.

Benefit: 10%, 20%, or 25 % of eligible expenditures are refunded from Maryland state income taxes.

Purpose of Preservation
Maryland has a goal of maintaining neighborhoods, including older areas. Therefore, the state's tax credit eligibility includes interior work such as heating and air conditioning systems, upgrades to electrical wiring, installation of modern kitchens and bathrooms, and other rehabilitation improvements. Remodeling expenses, such as changing Corian countertops to granite, will not qualify, but older homes will typically require substantial rehabilitation rather than remodeling. 

The Maryland state tax credit applies only to properties recognized as contributing resources in a locally designated historic district and eligible for listing in the National Register, or for properties already listed on the National Register. The program is administered by the Maryland Historical Trust (MHT), and applicants should talk directly to them. 

If the work is exterior and involves a change in the physical appearance of the exterior of the building or environmental setting, the work should be reviewed by the HDC as a courtesy review before the state tax credit application is submitted to the MHT. After the MHT approves the work, the project should be submitted to the HDC for a Certificate of Approval. This process is designed to streamline the needed reviews and prevent jeopardizing receipt of the tax credit. The state reviews may take up to three months for review.

Rehabilitation Expenditure
For owner-occupied residential property, the rehabilitation expenditure in a 2-year (24-month) period must exceed $5,000. If the tax credit exceeds the year's tax liability, the excess is refunded in a check. 501(c)(3) non-profit organizations are eligible for this program, as well as property owners who may not pay Maryland state income tax, such as military families. The application fee for this tax credit is 3% of the amount of the tax credit for which a single-family, owner-occupied rehabilitation would be eligible based on the greater of the estimated or final qualified expenditures for the rehabilitation project (effective July 1, 2011).

The fee will be due and payable in two installments:
  1. $10 at the time of the Part 2 Application submission; and
  2. The remaining balance of the 3% amount to be submitted with and prior to MHTrsquo;s approval of the Part 3 Application

For income-producing properties, the Maryland Sustainable Rehabilitation Communities Tax Credit program is available for commercial income-producing properties (including office, retail, rental housing, etc.). There are different credit levels available in this program:
  • 20% credit for "certified historic structures"
  • 25% credit for "certified historic structures" that are high-performance buildings (LEED Gold certified or the equivalent)
  • 10% credit for non-historic, “qualified rehabilitated structures”

The actual amount of Maryland Sustainable Communities Rehabilitation Commercial Tax Credits distributed each year is based upon an annual appropriation in the state's operating budget. The amount varies from year to year based upon the amount included in the Governor's proposed budget and the final budget passed by the General Assembly. The application fee for the review of commercial applications is 3% of the amount of the tax credit awarded to successful commercial tax credit projects.