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Historic Tax Credits
The City of Rockville participates in Montgomery County’s Property Tax Credit program for historic resources designated by the city. Montgomery County provides a property tax credit equal to 25 percent of qualified costs expended on exterior maintenance of properties designated historic by the Mayor and Council of Rockville. Owners of qualifying properties must spend a minimum of $1,000 in a calendar year. The tax credit is then applied against the following year’s property taxes.
Rockville’s Historic District Commission (HDC) reviews the tax credit applications, certifies that project work is eligible for tax credits and forwards recommendations to the County Department of Finance for approval. Any unused portion of this tax credit may be carried forward for up to five years.
Eligible expenses include work related to maintenance that has been approved by the HDC, or ordinary maintenance work that does not require HDC review. Your application must include copies of receipts for materials if you’ve done the work yourself, paid receipts from a licensed contractor, and photographs showing the “before” and “after” work to illustrate the expenditures. An owner’s labor costs are not eligible, but costs of materials may qualify.
Examples of eligible projects include, but are not limited to:
- Repairing roofs or windows or replacing them in-kind
- Repairing architectural trim or ornament
- Uncovering and repairing original siding
- Repointing brick or stone foundations or chimneys
- Restoring a documented feature such as a dormer or porch that was previously altered or removed
- Repairing and maintaining outbuildings such as barns and garages
New construction and interior work are not eligible, although interior structural repairs and trimming of branches that overhang the designated historic resource may be eligible.
Properties listed only in the National Register of Historic Places are not eligible for this County tax credit, but would be eligible for the State or Federal tax credit programs described below. Check to see if your property is designated as a Historic Districts.
Other Tax Credit Programs
State 20% Income Tax Credit
Maryland’s Sustainable Communities Tax Credit Program provides Maryland income tax credits equal to 20 percent of qualified costs expended in the interior and exterior rehabilitation of certified historic structures. Commercial (income-producing) properties may receive an additional 5 percent tax credit if the rehabilitation results in LEED (environmental) Gold certification. Income-producing structures that are neither designated nor eligible for designation, may qualify for a 10 percent state income tax credit if certain requirements are met.
State tax credit projects must be pre-approved by the Maryland Historical Trust to be eligible. Costs for projects that are remodeling (i.e., replacement of kitchens and bathrooms that are in good repair and that are replaced only for aesthetic reasons) do not qualify. Qualifying properties include those listed in the National Register of Historic Places, or those locally designated properties that the Maryland Historical Trust deems eligible for listing in the National Register. This program is administered by the Maryland Historical Trust.
Federal 20% Income Tax Credit
The Federal Historic Preservation Tax Incentives program offers Federal income tax credits for 20 percent of approved costs, for the rehabilitation of income-producing properties that are listed in the National Register of Historic Places. Information about federal tax credits is available from the National Park Service and Maryland Historic Trust.