Brownfield Property Tax Credit
Program Purpose and Description
This program was designed to encourage the re-development of contaminated abandoned
and/or under-utilized industrial/commercial sites. This program offers a city property tax
credit (for both real and personal property taxes) on the increased property taxes after
eligible improvements are made (improved value).
This credit applies in each of the taxable years immediately following the first
reassessment of the site after completion of the eligible improvements. The credit equals
50% of the site’s increased property assessment after improvements are completed over
the assessment before the improvements, except for projects that spend more than
$250,000 in eligible work,
1
in which case it is 70%. In the event of a change in ownership
of the property, the credit is transferable as long as the property remains qualified for the
credit.
Please Note: For sites located in State-designated Enterprise Zone areas, the credit is for
a 10-year period with the Enterprise Zone credit calculated first and the Brownfield
Credit only applicable to the improved value not covered by the Enterprise Zone credit
(for example, in the first five years, the Brownfield Credit only applies to 20% of the
improved value as 80% is applied to the Enterprise Zone credit). For all other sites
outside of an Enterprise Zone, the credit is for a 5-year period.
Eligibility:
o The site must be in the Maryland Voluntary Cleanup Program (VCP) or the
Maryland Oil Control Program and there must be a letter from the Maryland
Department of the Environment indicating no further action is needed;
o The site must be designated as a “Qualified Brownfields Site” by the Maryland
Department of Business and Economic Development. Note that site owners who
do not meet Maryland’s definition of an “Inculpable Person” are not eligible.
Termination
If the credit recipient withdraws from the voluntary cleanup program or the Department
of the Environment withdraws approval of a response action plan or a certificate of
completion, the tax credit granted will be terminated.
Legal Reference
State enabling legislation - Annotated Code of Maryland, Tax Property Article,
Section 9-229 (Chapters 1 and 2, 1997 Session).
Baltimore City Code, Article 28-Taxes, Section 10-10 (Ordinance No. 98-248,
effective April 16, 1998).
1
Eligibility for the 70% credit is dependent on an investment of at least $250,000 in the site’s purchase and
voluntary cleanup or corrective action plan.
Examples:
Less than $250,000 in Improvements and Not within State-Designated Enterprise Zone
Assessment
Before
Improvement
Assessment
After
Improvement
Improvement
Value
Amount
Eligible
for
Credit
City
Tax
Rate
* Credit Amount
Column (1) (2) (3) (4) (5) (6)
Calculation (2) - (1)
(3) *
50% (4) * (5)
Year 1 $500,000 $650,000 $150,000 $75,000 2.268 $1,701.00
Year 2 $500,000 $650,000 $150,000 $75,000 2.268 $1,701.00
Year 3 $500,000 $650,000 $150,000 $75,000 2.268 $1,701.00
Year 4 $500,000 $650,000 $150,000 $75,000 2.268 $1,701.00
Year 5 $500,000 $650,000 $150,000 $75,000 2.268 $1,701.00
* Assumes no tax rate change during the five year credit period.
Greater than $250,000 in Improvements Within a State-Designated Enterprise Zone, Not Focus Zone
Assessment
Before
Improvement
Assessment
After
Improvement
Improvement
Value
EZ Credit
%
Calculated
First
Amount
Eligible
for EZ
Credit
City
Tax
Rate *
Credit
Amount
for EZ
Amount
Eligible for
Brownfield Credit
Credit
Amount
for
Brownfield
Credit
Column (1) (2) (3) (4) (5) (6) (7) (8) (9)
Calculation (2) - (1) (3) * (4) (5) * (6) ((3) - (5)) * 70% (8) * (6)
Year 1 $500,000 $800,000 $300,000 80% $240,000 2.268 $5,443.20 $42,000 $952.56
Year 2 $500,000 $800,000 $300,000 80% $240,000 2.268 $5,443.20 $42,000 $952.56
Year 3 $500,000 $800,000 $300,000 80% $240,000 2.268 $5,443.20 $42,000 $952.56
Year 4 $500,000 $800,000 $300,000 80% $240,000 2.268 $5,443.20 $42,000 $952.56
Year 5 $500,000 $800,000 $300,000 80% $240,000 2.268 $5,443.20 $42,000 $952.56
Year 6 $500,000 $800,000 $300,000 70% $210,000 2.268 $4,762.80 $63,000 $1,428.84
Year 7 $500,000 $800,000 $300,000 60% $180,000 2.268 $4,082.40 $84,000 $1,905.12
Year 8 $500,000 $800,000 $300,000 50% $150,000 2.268 $3,402.00 $105,000 $2,381.40
Year 9 $500,000 $800,000 $300,000 40% $120,000 2.268 $2,721.60 $126,000 $2,857.68
Year 10 $500,000 $800,000 $300,000 30% $90,000 2.268 $2,041.20 $147,000 $3,333.96
* Assumes no tax rate change during the five year credit period.
Greater than $250,000 in Improvements Within a State-Designated Enterprise Zone AND Focus Zone
Assessment
Before
Improvement
Assessment
After
Improvement
Improvement
Value
Enterprise
Zone
Credit %
Calculated
First
Amount
Eligible
for EZ
Credit
City
Tax
Rate *
Credit
Amount
for EZ
Amount
Eligible for
Brownfield Credit
Credit
Amount
for
Brownfield
Credit
Column
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Calculation
(2) - (1)
(3) * (4)
(5) * (6)
((3) - (5)) * 70%
(8) * (6)
Year 1
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 2
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 3
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 4
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 5
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 6
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 7
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 8
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 9
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
Year 10
$500,000
$800,000
$300,000
80%
$240,000
2.268
$5,443.20
$ 42,000
$ 952.56
* Assumes no tax rate change during the five year credit period.
