Tax Credit FAQs

Your property may be eligible if it is: 

• Individually listed in the National Register of Historic Places
  • You can verify this by checking Medusa and typing in the address in the search bar. National Register-listed properties are outlined in purple.
  • You can read the National Register nomination linked in Medusa to learn about the property’s significance and historic features, which will guide how tax credit credit staff will review and consider your project application.
• A contributing resource in a National Register historic district
  • You can verify this by checking Medusa and typing in the address in the search bar. National Register-listed properties are outlined in purple.
  • If it’s within a National Register historic district but the nomination is not clear about whether it’s a contributing resource, MHT will confirm the property’s National Register eligibility as part of the application review.
• Designated as a local landmark or a contributing resource in a local historic district designated by a local government
  • Contact your local planning office to find out if your property is locally designated.
  • MHT will confirm the property’s National Register eligibility as part of the application review.
• A contributing resource to the significance of one of Maryland's 13 certified heritage areas
  • You can check if your property falls within a heritage area by going to Medusa. In the left-hand navigation, click the tab called “Layers” and check the box next to “Other MHT Base Data.” Then check the box labelled “Maryland Heritage Areas.” Typing the address in the search bar, and map will show if your property falls within a heritage area boundary.
  • [HOW DOES THIS GET CERTIFIED??]
• Pending one of the designations described above
  • You must submit supporting documentation to demonstrate this.  

Curatorship properties owned by the Department of Natural Resources may qualify for homeowner tax credits. Applicants must: 

• Submit documentation of the property’s significance (commonly, this is a Determination of Eligibility form)
• Include the curatorship agreement with Part 1 

Yes. Properties in districts need a Part 1 (Certification of Significance) unless they are individually listed in the National Register.  

Yes, once a draft nomination is submitted to MHT – but the property must be officially designated by the end of the calendar year in which the project is completed, or the credit is ineligible.  

The most typical applicants for the homeowner tax credit are homeowners who reside in single-family historic homes. 

Other eligible applicants include: 

• Trusts, if a beneficiary lives in the home
• Condominium owner, if work is limited to the owner-occupied unit (and building envelope items as applicable)
• Owners of mixed-use properties, if work is limited to the owner-occupied interior household space and the exterior envelope. Shared systems (HVAC, plumbing, electrical) are prorated by area and will require an itemized Part 3 spreadsheet. 

Limited liability corporations, limited liability partnerships, and limited liability limited partnerships are not eligible for the homeowner tax credit. They may apply for the competitive commercial or small commercial tax credits.    

To claim the credit, the new owner must have purchased the property within 24 months and submit the Part 3 Application with all supporting documents, including an Itemized Spreadsheet, photographs, invoices, and certifiable proof of payment. A purchase from a developer does not guarantee the credit; MHT will only certify the tax credit after reviewing the application and verifying all completed work and financial documentation. Without the required financial documentation, MHT cannot certify the project. 

Yes. Residency isn’t restricted, but the home must be your owner-occupied, single-family residence (not rented or a source of income).

All Maryland Historic Revitalization Tax Credit Program projects must meet the Secretary of the Interior’s Standards for Rehabilitation, as determined by MHT, and only costs that enhance the historic significance and character of the property are eligible for tax credits. MHT applies a conservative interpretation of the Standards that may differ from other interpretations (see section on “Other local, state and federal approvals”). MHT’s interpretation is final for this program. 

If you have a question about project eligibility or approach, please contact [email protected]. 

Examples of eligible costs include:

• Structural stabilization or foundation repair 
• Masonry repair or repointing using compatible materials 
• Roof repair or replacement with historically appropriate materials 
• Window and door restoration, or in-kind replacement 
• Mechanical, electrical, and plumbing upgrades 
• Accessibility improvements (for example, ramps, elevators, restrooms)  
• Interior finish restoration, including plaster, flooring, or trim  (Can include mantels and some cabinetry when part of rehabilitation)
• Professional design, architectural, or engineering fees related to the project (Must be incurred within the 24-month project period — see “Process, timing & fees” below)
• Solar may qualify if the installation meets the Standards and the system is purchased, not leased. Detached systems that only serve the property can qualify.  

Examples of ineligible expenses include:

• Acquisition, financing charges, permits
• Landscaping/site work (driveways, sidewalks, non-historic garden features), except documented significant historic landscape features; retaining walls integral to the building may qualify
• Cleaning only (e.g., gutter cleaning, chimney sweeping) unless part of a repair project
• New construction (additions, new decks, roof decks). Such work still must be reviewed for Standards compliance, but costs are not eligible.
• “Remodeling only” (for example, replacing a functional kitchen or bath with no rehabilitation need). Consult MHT if unsure.  

Changes occur to buildings over time that may detract from a property’s historic significance or historic character (for example, vinyl or aluminum siding over wood siding). You’re not required to “fix” these changes (for example, remove vinyl siding and repair the wood siding underneath) if no work is planned on that part of the property.  

Later additions (for example, a 1980s family room) are considered part of the overall structure and work may be eligible. Changes to these additions must still meet the Secretary of the Interior's Standards for Rehabilitation.  

In the case of DIY projects, tax credits will only apply to materials. Personal labor is not eligible.

Deposits can be paid before certification of the Part 2, so long as work does not start until after. However, work begun or completed before MHT approves Part 2 is ineligible for the credit, even if it meets the Secretary of the Interior’s Standards for Rehabilitation. Any materials bought before approval may not be eligible.

Review time varies by program and depends on the completeness and complexity of the application. 

Homeowner and small commercial tax credits are reviewed on a first-come, first-served basis. The typical review time for a complete submission is 30–45 days. 

The review period for the competitive commercial tax credit is approximately 90 days after application deadline.

Homeowner & small commercial tax credits 

• Part 1: No fee.
• Part 2: $10 initial review fee.
• Part 3: 3% of the credit amount (20% of qualified expenditures), minus the $10 Part 2 fee. 

Competitive commercial tax credit 

• Part 1: No fee.
• Part 2: $250 initial review fee.
• Part 3: 3% of the credit amount (20% of qualified expenditures), minus the $250 Part 2 fee. 

You have 24 months to complete eligible work. The clock starts with eligible pre-construction costs (e.g., certain professional fees) or, if none, when construction starts after MHT certifies Part 2. Deposits are a partial payment and do not start the project clock. 

Many tax credit projects receive more than one kind of public financing or go through other permit approvals. These approval timelines can complicate a project [insert advice here] 

Note: other local, state and federal approvals do not replace MHT’s approval, even if the permitting authority (for example, a local historic preservation commission) also applies the Secretary of the Interior's Standards for Rehabilitation. If you plan to use the state credit, you must get MHT’s Part 2 approval before starting work. 

Because MHT applies a conservative interpretation of the Secretary of the Interior's Standards for Rehabilitation, it is strongly recommended that you seek MHT approval before other approvals. 

If you are eligible for the federal tax credit program, you can apply for both the federal and state programs. You must submit the entire federal application with all information and documentation, as well as the whole state application. These can be submitted to MHT together. 

If your tax credit project receives other state or local financial assistance, such as grants, loans (unless they are state loans at a non-discounted rate), or state energy tax credits, you must subtract these amounts from your qualified expenditures on the Part 3 application. However, you do not need to subtract funds anticipated from a local tax incentive program or any federal incentives like grants or tax credits. If you are unsure about state loans, you should contact the tax credit staff for specific guidance. 

Costs reimbursed by insurance are also not eligible and must be subtracted on Part 3. All deductions and funding sources must be clearly documented on the homeowner/small commercial - XLSX 20.32 KB or competitive commercial - XLSX 20.03 KB itemized expense spreadsheet. 

For Part 2, you'll need to submit interior and exterior photos to document conditions. Without them, MHT may deny the application. 

Current photos are best. Photos older than 90 days may not reflect current conditions. A professional photographer is not required. Photos from a phone or digital camera are acceptable if they meet size and labeling - PDF 150.2 KB requirements.

There’s no fixed deadline for filing Part 3, but to claim the credit for a given tax year, submit in time to file with the Comptroller (MHT recommends by February 1). Use Maryland Form 502S specific to the year in which you are filing. The certified Part 3 application must be attached to Form 502S. Questions about claiming the credit should be directed to the Comptroller of Maryland’s office.  

Submit the following with Part 3:

• Before and after photos
• Invoices and certifiable proof of payment for the work undertaken, showing how you calculated your qualified rehabilitation expenditures
• Homeowner/small commercial - XLSX 20.32 KB or competitive commercial - XLSX 20.03 KB itemized expense spreadsheet (showing eligible costs and any subtractions for insurance/State aid) 

These sample spreadsheets have instructions on invoices and certifiable proof of payment for the homeowner - PDF 341.19 KB, small commercial - PDF 881.05 KB and competitive commercial - PDF 846.29 KB programs. It shows how to properly itemize your paid receipts/invoices and it must be submitted with your Part 3 application.

Yes, this specific Maryland tax credit is refundable, which is a great benefit for taxpayers. This means that to the extent the credit amount is larger than your total state tax bill (your tax liability), the remaining portion of the credit will be paid directly back to you as a refund check. For example, if you owe $1,000 in Maryland taxes but qualify for a $4,000 credit, the first $1,000 covers your tax bill completely, and the remaining $3,000 is then sent to you as a refund. 

Property owners must ensure that any changes to the property adhere to the Secretary of the Interior's Standards for Rehabilitation for five years after the certification of the tax credit. Inappropriate work within the five-year period may cause the state to recapture all or part of your tax credit. 

Yes. You may submit a new application every 24 months to continue work. This will, however, start the five-year clock again after the last tax credit is received. 

File an Amendment describing the work so MHT can confirm it meets the Secretary of the Interior's Standards for Rehabilitation without triggering recapture. 

If non-compliant work is done, the state may recapture part of the credit: 

• Year 1: 100%
• Year 2: 80%
• Year 3: 60%
• Year 4: 40%
• Year 5: 20% 

After five years, the property owner is not at risk of recapture.  

If you sell your property during the five-year period, your prior credit will not be recaptured even if the new owner performs non-compliant work.