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Maryland Historic Trust explains historic designations, tax credits

Elizabeth Hughes, deputy director of the Maryland Historic Trust, said there are four types of historic designations that grant agencies a level of control over historic properties.

The first two are if a building is placed on the National Register of Historic Places or the Maryland Inventory of Historic Properties, she said.

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If a developer is using state or federal funding for the development of a property on the national register, the MHT will conduct a review of the developer's plans. This review determines the impact the project could have on the surrounding area's historic heritage, Hughes said.

"We would then have a shared consultation process with the agency funding the project to determine if there is a way to accomplish the developer's goals without compromising the historic aspects," she said.

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For developments on the national register involving private funding, the Carroll County Historic District Commission would conduct the review.

The HDC also has jurisdiction on any property in the county that is on the Maryland Inventory of Historic Properties — both private and government funded projects.

If a building is located in a local historic district, this carries with it certain implications in terms of what the property owner can or cannot do. This is the situation in Westminster and Sykesville, Hughes said. The local government can exercise its right to enforce the guidelines they follow.

Lastly, historic preservation easements can be granted to an agency as a gift from current property owners, Hughes said. They act as insurance against future changes.

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"The MHT holds certain easements which gives us an amount of review authority over these specific properties, which ensures investments we are making have an appropriate life span," she said.

Collin Ingraham, the administrator of the preservation financial incentives program at the MHT, said they offer three tax credits that are geared toward in-fill development of historic buildings.

The most widely known is the competitive commercial tax credit. This credit acts much like a grant in that all applications received are assessed to ensure that they meet the standards for the treatment of historic buildings. A rating is then given to each project to determine who will be awarded the limited amount of money.

"The project must include a significant rehabilitation, defined as doubling the value of the actual building, not necessarily the whole property," Ingraham said.

The second and longest running credit is the homeowner tax credit, he said.

To qualify for the credit, a homeowner must spend at least $5,000 over a two-year period; they can apply multiple times for the same property. The credit is capped at $50,000 in any two-year period, and the homeowner receives 20 percent of eligible costs, which is paid to them as part of their tax return, Ingraham said.

During the General Assembly's session this year, they created a third credit, called the Small Commercial Tax Credit, that targets smaller businesses that were having a hard time competing with large construction projects for the competitive commercial tax credit.

Projects don't have to meet the significant rehabilitation standards as defined in the competitive commercial tax credit, but the developer must spend $5,000 and it must be a commercial project. The Small Commercial Tax Credit works exactly like the homeowner credit in that the developer is eligible for a return of 20 percent of eligible costs with a cap of $50,000.

This applies to properties not just in historic districts but also members of the sustainable communities program run out of the Maryland Department of Housing and Community Development, he said. It's mainly designed for rehabilitations less than $500,000.

"This [credit] really focuses on smaller Main Street communities," Ingraham said.

The MHT is accepting applications for this new credit but can't approve work until early January, Ingraham said.

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