Historic Preservation Tax Credits
a visual guide to saving places and recouping costs
What is a Historic Preservation Tax Credit?
Credits are a reduction in federal, state and local taxes depending upon the credit program/s a person or entity participates with.
The Ordinance
County historic tax credit updates became effective in May of 2024. You can view the ordinance in its entirety .
The Application
NOTE: If you are completing a tax credit application for State or Federal Historic Tax Credits, you can submit those applications to the Historic District Commission with only the County's signature Certification Page. There is no need to fill out both a County Tax Credit application and the alternative State/Federal applications.
Why choose to participate in the Historic Tax Credit Program?
Tax credits can provide a recuperation of costs associated with rehabilitation, restoration or renovation of historic structures. When awarded for qualifying exterior updates, they offset the costs to maintain building envelopes which are critical in the preservation of structures. Individuals or entities applying for the credit will benefit from additional resources and review on the property in the future. This additional review ensures that both their investment, and the County's through tax credits, continue to protect resources important to Washington County's heritage.
From "Why Old Places Matter", Thompson M. Mayes, National Trust for Historic Preservation ...
“These special places, these works of architecture, are works of art. Like painting, music or literature, these buildings help us understand our capacities as humans.”
25% of the project costs is available as a tax credit
Who Qualifies?
Residential or Commercial Properties listed on the Maryland Inventory of Historic Properties . Properties need to be in a qualifying geographic area before the credit work begins. Contact the Department of Planning and Zoning at askplanning@washco-md.net for more information on qualifying areas or continue reading.
What work is eligible?
EXTERIOR rehabilitation, restoration or preservation to a contributing structure that minimizes the destruction of the historic fabric and has a thoughtful and sympathetic design is eligible for a 25% credit.
New construction attached to an existing historic structure would be eligible for an additional 5% tax credit for the exterior work.
When should you apply?
Application for credit should be done PRIOR to completing work.
Remember, if you are completing a State or Federal Tax Credit application, you may submit that as equivalent documentation using only the Certification signature page from the County's application.
Where must the qualifying structures be located?
Structures must be within the Antietam Overlay (AO1 or AO2) district, a contributing structure to a surveyed and adopted Historic Rural Village ( Antietam , Cavetown , Fairplay , Highfield , Leitersburg , Pen Mar , Ringgold , Rohrersville , Sandy Hook , or Tilghmanton ) OR prior to receiving a tax credit they must complete application to be included in the County's Historic Preservation Overlay (HP). Contributing structures located within Towns listed on the National Register of Historic Places with appropriate zoning and design guidelines also qualify.
The additional 5% credit is for EXTERIOR changes only on NEW construction attached to an existing historic building.
Summary of Programs and Residential/Commercial qualifications
Administered through the Maryland Historical Trust, this program offsets qualifying rehabilitation expenditures in a 24 - month period which must exceed $5,000. The credit is deducted from the amount of state income tax due for the calendar year in which the project was completed. In the event the tax credit exceeds the amount due, the state will issue a refund for the overage. Visit the Maryland Historical Trust for more information.
Administered through the Maryland Historical Trust, this program offsets qualifying commercial rehabilitation expenses which must exceed the greater of $5,000 or the adjusted basis of the building. The tax credit is deducted from the applicant's Federal Income Tax. Visit the Maryland Historical Trust for more information.
Fast Facts about the Federal Historic Tax Credit
Over the life of the program, the historic rehabilitation tax credit (HTC) has:
- created more than 2.5 million good-paying local jobs;
- leveraged $144.6 billion in private investment in our communities;
- used $27.5 billion in tax credits to generate more than $32.4 billion in federal tax revenue;
- and preserved more than 44,341 buildings that form the historic fabric of our nation.
What is an HP or AO District?
Owners of historic properties must voluntarily apply for and receive Historic Preservation District zoning (HP ) or be located in an Antietam Overlay district (AO1 or AO2 ) in order to receive County tax credits. In these districts, any exterior activity that requires a building permit will be reviewed by the Historic District Commission (HDC). This includes construction, reconstruction, relocation, restoration, rehabilitation, modification, enlargement, conversion or demolition to any portion of the exterior features.
This map displays the Antietam Overlay zoning designations and also contains the Historic Preservation Overlay. Expand the map in the upper right corner to explore.
What is the Maryland Inventory of Historic Properties (MIHP)?
The Maryland Inventory of Historic Properties (MIHP) is a repository of information on districts, sites, buildings, structures, and objects of known or potential value to the prehistory and history of the State of Maryland. The Inventory was created shortly after the Maryland Historical Trust was founded in 1961, and now includes data on more than 13,000 archaeological sites and 43,000 historic and architectural resources. The MIHP includes information about both standing structures and archaeological resources. Inventoried properties contribute information to our understanding of Maryland’s architecture, engineering, archaeology, or culture. - Maryland Historical Trust
What the MIHP is NOT...
The inventory is for documentation purposes. Inclusion on the inventory alone does not permanently protect a property. However, there are some additional reviews at the County level that may be required in combination with the inventory such as the HP or AO overlays, historic rural villages etc.
This map displays the Antietam Overlay zoning designations and also contains the Historic Preservation Overlay. The Washington County structures included in the Maryland Inventory of Historic Properties are also displayed. Historic Rural Villages and National Register Districts are also shown. Expand the map in the upper right corner to explore.
What's a Historic Rural Village?
The name Rural Village is really derived from the implementation of State legislation in 1997-1998 . In order to have that designation locally applicable to the County's geography and to have Priority Funding Area status, a map of those unincorporated communities that met the criteria was created with local ordinance/mapping and named Rural Villages. Rural Village zoning in the County jurisdiction further follows those original outlines of the unincorporated areas as of 1998, so there is a definition of Rural Village, as it is applied, in our local zoning ordinance as well.
Historic Rural Villages are generally located in the same geographic area as the zoning designations, but they do not always follow the zoning boundary. Rather they are derived from completed historic resource context surveys to determine contributing and non-contributing structures to the development of the specific rural community. Historic Rural Villages that have completed and adopted surveys include: Antietam , Cavetown , Fairplay , Highfield , Leitersburg , Pen Mar , Ringgold , Rohrersville , Sandy Hook , or Tilghmanton .
These historic rural villages are areas where the Historic District Commission has existing exterior Architectural Design Review derived from the zoning ordinance and they are also now qualifying areas for County Historic Tax Credits!
Frequently Asked Questions...
Can tax credits be combined?
Yes. For example, a commercial structure in a National Register town can be eligible for up to 70% tax credits (20% Federal, 20% State, 25% County and 5% for exterior new construction).
How do I apply for a tax credit?
For those projects requiring a building permit...
Submit your completed permit application with construction drawings to the Planning and Zoning Department as well as the completed tax credit application. The complete application is then forwarded to the Historic District Commission for review of appropriateness. The application must be approved BEFORE construction. Complete the project according to approved plans, retaining all receipts and supporting documentation (before and after photos encouraged). After final inspection, apply for the tax credits and attend the Historic District Commission meeting to support and explain your project and application.
If my property is on the National Register, do I still need to apply for the HP Zoning Designation?
Yes. inclusion on the National Register does not automatically make structures eligible for County Tax Credits. Owners must apply for and receive HP Zoning.
Can my interior updates qualify for County tax credits?
No. At this time only EXTERIOR changes are considered for tax credits.
Can my building maintenance costs be offset with these tax credits?
No. Maintenance costs are not eligible for tax credits.
I'm a commercial property owner, what tax credit programs do I qualify for?
Depending on your property you could qualify for Federal, State and County credits if your property is on the National Register. If not on the National Register then you can still qualify for County tax credits following the County application procedures. Please contact the Department of Planning and Zoning to verify eligibility as guidelines can change.
I own a residential property, what tax credit programs do I qualify for?
Generally residential properties can qualify for State and/or County tax credits. There are criteria that must be met so please contact the Department of Planning and Zoning to verify eligibility as guidelines can change.
How long does the process of tax credits take?
Each reviewer (state and local) will have different timelines as well as application review criteria. Contact the applicable program for current review times.
What could qualify for a tax credit but might not need a building permit?
Examples of exterior changes that might qualify if pre-approved by the HDC include replacement or repair of siding, gutter/downspout repair and replacement, door or window replacements where no structural members are changed (same size, same location), repair of architectural trim or ornaments, repair or replacement of roof (as long as structural members remain intact and its a like building material ex. shingle to shingle). These listed exterior changes can greatly affect the historic structure's integrity. Remember to apply for the tax credit PRIOR to undertaking any work even if a permit is not required.
A tax credit application must still be completed.
Important Note: This list is meant to guide discussion regarding historic property maintenance. The list is based on Residential Code (IRC) and any Commercial work should always be discussed with the Division of Plan Review and Permitting prior to any work. The list is not exhaustive and changes to Building Code requirements and County policy may occur. Always check with the Washington County Permitting Office prior to beginning work to verify permits are not required. A further list of activities not requiring a permit is located on the Permitting website.
Location of Tax Credits
