Tuesday, July 16, 2013

Council Approves Increasing Tax Credits for Historic Properties

Today we approved a bill that will allow owners of properties designated as “historic” to take tax credits of up to 25 percent for qualified improvements that help preserve the historic nature of the property. This is a great incentive for property owners to make investments in preservation that benefit us all.

Maryland and Montgomery County have previously allowed tax credits of 10 percent for qualified improvements to historic homes. As of July 1, the state law changed and now allows a 25 percent tax credit. Passage of the bill keeps the County at highest possible tax credit allowed by law.

The Council designates specific properties or districts as historic by including them in the Master Plan for Historic Preservation. The designation provides public benefit by retaining the history of the property. However, the owner of a historic property has additional burdens compared to other property owners.

Once designated, the owners of historic property must seek a historic area work permit before making changes to the exterior of their property. The review is intended to ensure that the historic integrity of the site is maintained. The cost for improvements to historic properties is generally higher than it is for non-historic properties as the material and labor necessary to adhere to historic preservation standards make improvements more expensive. The tax credit will help offset this burden. In FY11, there were 141 applications for historic tax credits. Kudos to Councilmember Craig Rice for sponsoring this legislation.

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