The state of Maryland permits local governments (Md Code: Property Tax § 9-242) to offer property tax credits for high performance buildings if they choose to do so. Montgomery County has exercised this option by offering property tax credits on new or extensively modified multi-family residential and commercial buildings that meet certain high performance building standards. An "extensive modification" is defined as a structural modification that alters 50% or more of the building's square footage.
The tax credit generally uses the U.S. Green Building Council's LEED rating system as a metric for determining how "green"' a building is, although buildings that achieve comparable ratings under other green building standards are also eligible for the tax credit. Tax credits are available for buildings that achieve minimum ratings under the LEED New Construction (NC); Core and Shell (CS); and Existing Building (EB).
The amount (10-75%) and term (3-5 years) of the tax credit varies based on the type project and the rating it achieves. See the table below for details. The term "covered" refers to new or substantially reconstructed non-residential and multi-family residential buildings over 10,000 square feet, which are already required by county law to meet the basic LEED certification standard or its equivalent. Thus the minimum standard for property tax credits on buildings of this type is correspondingly higher.
| Building Type | Certification Type | Exemption Amount | Term |
|---|---|---|---|
| Covered | LEED-NC or LEED-CS Platinum | 75% | 5 years |
| Covered | LEED-NC or LEED-CS Gold | 25% | 5 years |
| Covered | LEED-EB Platinum | 50% | 3 years |
| Covered | LEED-EB Gold | 10% | 3 years |
| Not Covered | LEED-NC or LEED-CS Platinum | 75% | 5 years |
| Not Covered | LEED-NC or LEED-CS Gold | 50% | 5 years |
| Not Covered | LEED-NC or LEED-CS Silver | 25% | 5 years |
| Not Covered | LEED-EB Platinum | 50% | 3 years |
| Not Covered | LEED-EB Gold | 25% | 3 years |
| Not Covered | LEED-EB Silver | 10% | 3 years |
Property taxpayers must apply for the tax credit within one year after a building is certified as a high performance building. There is a limit of $5 million per fiscal year (July 1 - June 30) on the total volume of tax credits granted, and limits of $1.5 million and $2.5 million for buildings rated LEED Silver and LEED Gold respectively. Credits in excess of these limits will be issued for the subsequent fiscal year or years.
| Implementing Sector: | Local |
| Category: | Financial Incentive |
| State: | Maryland |
| Incentive Type: | Property Tax Incentive |
| Web Site: | https://www.montgomerycountymd.gov/finance/taxes/tax_credit_exempt.html#p19 |
| Administrator: | Department of Finance |
| Start Date: | 03/17/2008 |
| Eligible Renewable/Other Technologies: |
|
| Incentive Amount: | 10% to 75% credit from property taxes owed on building for 3-5 years; varies by building type and building rating |
| Maximum Incentive: |
Total: $5 million per fiscal year limit for all buildings Silver rating: $1.5 million per fiscal year Gold rating: $2.5 million per fiscal year |
| Eligible System Size: | Building must meet minimum LEED standards (CS, NC, or EB) or equivalent to qualify |
| Name: | Montgomery County Code Sec. 52-18Q |
| Date Enacted: | 12/17/2007 |
| Effective Date: | 03/17/2008 |
| Name: | High Performance Building Property Tax Information - Montgomery County |
| Organization: | Montgomery County Department of Finance |
| Address: |
255 Rockville Pike, Suite L-15 Rockville MD 20850 |
| Phone: | (240) 777-8965 |
| Email: | treasury@montgomerycountymd.gov |
This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.
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