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Historic Tax Credits

If you have ever done work to your historic home, you are aware thatphoto of homes
maintaining and updating it can be quite costly due to rules governing our
neighborhood. It is true that living in a historic district carries with it a responsibility to preserve and in some cases, incur a great deal
of expense to replace or update things in your home. However, it also
carries with it many tax incentives that can put cash in your pocket as
well as provide significant savings on your future property tax bills.

The State and City governments both offer incentive programs that help
homeowners living in historic districts handle the expense of preserving
the historic aspect of their homes.

The State's program is a Refundable Income Tax Credit. To qualify, a
homeowner must spend at least $5,000.00 over a 24-month period in order to
recoup 20% of his expense in the form of a tax credit. This means that if
you spend $50,000.00, you are eligible to receive a $10,000.00 Income Tax
Credit. If you only owe the State $5,000.00 in tax, the State will send
you a check for the remaining $5,000.00. If you owe no State tax, you will
simply receive a check back for $10,000.00.

The City program is a Property Tax Abatement program whereby the homeowner
must invest 25% of the full cash value of the home as assessed by the State
in order to receive a 10-year credit.

These programs have rules and regulations associated with them as well
as a bit of paperwork, which can be significant depending on the amount of
work that has taken place or will take place on your property. Note that
you can get credit on work you completed in 2002 or after.

While every person is capable of doing the paperwork necessary to qualify
for these programs, the rules and parameters governing the programs can be
tricky for the State's "all or none program." This means is that if you
do one thing that disqualifies you from the program, all other work that may
have otherwise qualified will not. Trained consultants can suggest planning
and legal strategies that will help you avoid these pitfalls.

Get more information on the State historic tax credit.

Get more information on Baltimore City's historic tax credit.




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