Federalsburg buildings open for historic preservation tax credits
FEDERALSBURG — Now that Federalsburg has an established National Register Historic District, an estimated 300 to 400 buildings within it are eligible for their owners to apply for state and federal tax credits, to help defray the costs of preser ving and restoring their historical significance.
The Federalsburg Business and Civic Association hosted an informational presentation on those tax credits during its meeting Wednesday, March 29.
Federalsburg Main Street Manager George “Happy” Mayer said the town’s downtown area was officially recognized in June 2016 as a National Register Historic District.
To qualify for the tax credits discussed, a building must either be in such a district, or be individually listed on the National Register of Historic Places.
Mayer said there are two buildings in town outside the district, but on the register: Exeter and the log cabin in Chambers Park.
Nakita Reed, an architect with Encore Sustainable Design, a firm specializing in historic preservation and sustainable design, went over the credits available for owners of residential and commercial properties, the process for applying and the work deemed eligible.
In general, Reed said, any component that physically stays with the building is eligible for the tax credits, such as walls, floors, ceilings, paneling and tiles, windows and doors, chimneys, stairs and more.
Not on that list are cabinets and carpeting that is tacked in place, instead of glued, Reed said.
There are four tax credits available, Reed said, designated for homeowners or owners of small or large commercial projects. Nonprofits are also eligible for the tax credits, through a process called syndication.
Of the four credits reviewed, Reed said only the Maryland State Historic Tax Credit is competitive and has an application deadline; the other three are noncompetitive and applications are accepted on a rolling basis.
The tax credits all cover 20 to 25 percent of qualifying work, claimed over a five-year period.
Reed said it was important to remember construction on a project should not start until the second of three parts of the application process has been completed, as tax credits can be reclaimed if work is done that is determined to be outside the set standards.
Ward Bucher, also with Encore, reviewed two local projects the firm has completed.
Bucher said the application requires a description of the building’s historical significance, pictures of the interior and exterior in their current condition, schematics of the current layout and the proposed renovation and a description of how each section will be rehabbed.
After work is done, photos must be submitted from the same angles, Bucher said, to show the transformation of the space, along with an itemized list of final costs, including local grants and funding.
Bucher said there are pros and cons to accepting the tax credit.
While property owners get a dollar-for-dollar credit, and the restoration works improves the community, Bucher said, some owners are wary of the agency reviews of their building’s exterior and interior. There is also a fiveyear restriction on further design changes, and owners pay income tax on the tax credit.
For more information, contact Encore’s Easton office at 410-7709009 or its Annapolis office at 301965-0096.