These regulations address the High-Performance Newly Constructed Dwellings Tax Credit. These regulations describe:The application process for obtaining the tax credit, The criteria for qualifying for the tax credit, The application process for obtaining a certification of the dwelling as a highperformance newly constructed dwelling, The criteria for maintaining eligibility for the tax credit, How the tax credit is applied, whether it is transferable and when the tax credit program will terminate, and The effect of other tax credits on how the High-Performance Newly Constructed Dwelling Tax Credit is applied to a dwelling.

In <cite data-path="05.01.07">this chapter</cite>, the following terms have the meanings indicated. Terms Defined.“Closing Documentation” means any form from the settlement of the sale of real estate that contains the address of the property transferred, the parties to the transfer, and the date of the transfer. “Credit” means the tax credit described in these regulations for highperformance newly constructed dwellings. “DHCD” means the Baltimore City Department of Housing and Community Development. “Finance” means the Baltimore City Department of Finance. “HERS” means the Home Energy Rating System. “High performance” has the meaning stated in MD <cite data-doc="Md. Code" data-path="gtp|9242">Tax-Property Article, §9242(a)</cite>. “LEED” means the U.S. Green Building Council’s Leadership in Energy and Environmental Design. “Newly constructed dwelling” has the meaning stated in <cite data-doc="City of Baltimore, Md., Code" data-path="|28">City Code Article 28</cite>, §10-18.1(a)(3). “NGBS” means the National Green Building Standard. “Owner” has the meaning stated in MD <cite data-doc="Md. Code" data-path="gtp|9-304">Tax-Property Article, §9-304(d)</cite>. “System” means the Department of Finance’s Online Tax Credit Application System. “Vacant dwelling” has the meaning stated in <cite data-doc="City of Baltimore, Md., Code" data-path="|28">City Code Article 28</cite>, §10-18.1(a)(5).

The credit is against the property tax imposed on a high-performance newly constructed dwelling that is owned by a qualifying owner. The creditBegins at 50 percent of the tax imposed on the qualifying property in the first full tax year in which the property qualifies and Decreases by 10 percent in each of the four following years. The property no longer qualifies for the creditBeginning in the sixth full tax year after the property initially qualifies; or If continuing eligibility requirements are not met.

To be eligible for the credit a property owner shall meet the following criteria:Purchase and occupy as the property owner’s principal residence a highperformance newly constructed dwelling; Receive a high-performance certification from DHCD; File a state income tax return as a resident of Baltimore City for each taxable year for which the credit is sought; The property owner may not be receiving the credit previously authorized under <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-5">City Code Article 28, § 10-5</cite>; and The property owner shall timely submit a completed application in accordance with the specifications in § .05. To be eligible for the credit a property shall:Be one of the following:A newly constructed dwelling, or A vacant dwelling; Be located within the City of Baltimore; Be purchased by the owner-occupant following completion of the dwelling, or be constructed on land that was purchased by the owner-occupant prior to construction of the dwelling; Receive an occupancy permit following the construction or conversion; and Meet the standards set forth in the Maryland <cite data-doc="Md. Code" data-path="gtp|9-242">Tax-Property Article, § 9-242(a)</cite>. A property that meets the eligibility criteria and has an approved application becomes eligible for the credit with the first full-year tax bill issued after the latest ofThe high-performance certification date, The date on which the use and occupancy permit was issued, The first assessment notice of the newly constructed dwelling, or The date of settlement. The following items must be received by Finance prior to the approval of the property’s application:An application for the tax credit that is both:Complete, and Submitted in a timely manner; A final occupancy permit for the completed dwelling; and A certification of the property as a high-performance newly constructed dwelling by the DHCD. A credit may not be issued until the property is certified by DHCD as a highperformance newly constructed dwelling. DHCD shall issue a certification that, to the extent possible, provides a certification date that reflects the date on which the property became a HighPerformance building. In the event DHCD denies certification, DHCD will provide a letter identifying the reason for the denial. Prior to the issuance of a credit, the property owner is liable for all taxes due. Properties remain eligible for the credit for a period of five consecutive tax years.

An applicant who has purchased a newly constructed dwelling shall submit a completed application within 90 days after settlement. An applicant who has constructed a dwelling on land purchased prior to the construction of the dwelling, shallSubmit a completed application within 90 days of the issuance of a final occupancy permit for the dwelling, and Include complete documentation of the construction cost of the new dwelling. An application shall be submitted electronically via the system.This system can be accessed via the internet at the following url: <u>https://propertytaxcredits.baltimorecity.gov</u> An applicant shall create a user account to gain access to the application system. The user account may be used to apply for this and other tax credits for the property. An application or required documentation may not be submitted in paper form. The City of Baltimore shall not be responsible forConnectivity issues experienced by the applicant, or Issues beyond the control of the City of Baltimore’s Department of Finance. For tax credit applications DHCD shall certify the property as a high-performance newly constructed dwelling.For a timely submitted application, the Department of Finance shall provide the relevant details of the subject property to DHCD for certification of the property. For a newly-constructed dwelling built on vacant land DHCD shall review the plans to determine whether the dwelling was constructed according to the high-performance elements of the Baltimore City Residential Building Code. Dwellings constructed prior to 2015 or that were substantially renovated without obtaining a new construction plan number and plan approval from the DHCD permit center shall qualify for the credit by completing one of the following:Obtain LEED rating for the property of Silver or higher. Obtain a certification from NGBS (ICC 700) rating the property Silver or higher. Obtain a rating from a certified energy rater for the HERS Index of 80 or lower and must achieve an increase in energy efficiency of at least 20 percent. Failure to file certification documentation required under .05(F)(3) with Finance within 30 days of receipt shall result in rejection of the application and the applicant may not reapply. All final applications for the High-Performance Newly Constructed Dwellings Tax Credit shall be accompanied by:A copy of the final occupancy permit issued for the property after construction or rehabilitation was completed, A copy of any building permit issued during the construction or rehabilitation of the property, A copy of the closing documentation issued to the purchaser at the time of settlement on the new dwelling or the land on which it was built, and Other required documents available at the time of application. If an occupancy permit is not issued to the property prior to settlement, the property owner shallSubmit a letter with the application stating that no occupancy permit was issued prior to settlement, and Email a copy of the occupancy permit to <u>tax.credits@baltimorecity.gov</u> when it is received.

The High-Performance Newly Constructed Dwellings Tax Credit is not transferrable to subsequent owners of the property.

The property owner shall ensure that, during the credit period the property for which the credit was granted meets the following criteria:Is in full compliance with the building, fire, and related codes of Baltimore City; Maintains its high-performance rating; and Is the applicant’s principal residence. For each taxable year for which the credit is sought, an applicant shall file a state income tax return as a resident of Baltimore City. If a property no longer meets the continuing eligibility requirements, the credit will be removed from the property’s account and may not be reinstated until the issue has been remedied. The eligibility term of the credit is 5 consecutive tax years, beginning with the first full tax year in which the property qualifies for the tax credit. Ineligibility for the credit during one or more of the five years in the eligibility term will not extend the five-year term of the tax credit.

A property receiving a tax credit under <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-5">City Code Article 28, § 10-5</cite> is not eligible for the High-Performance Newly Constructed Dwellings Tax Credit. The calculation of this credit shall be made prior to the application of any tax credit awarded under the Maryland <cite data-doc="Md. Code" data-path="gtp|9-229">State Tax-Property Article, § 9-229</cite>. The calculation of this credit shall be made afterThe application of any credit awarded to the property under Maryland Tax Property Article §§ 9-104 and 9-105; and Any other real property tax credit other than the credit specified in .08(B).

An owner whose settlement on the purchase of a high-performance newly constructed dwelling occurs after June 30, 2027 may not apply for this credit.

<cite data-doc="COBRA Register Volume 04, Issue 02" data-path="05.01.13">This chapter</cite> establishes rules and regulations related to the Energy Conservation Devices Tax Credit, including: Application processes for obtaining the tax credit; Criteria for qualifying for the tax credit; How the tax credit may be applied to the City Real Property Tax on a dwelling; Transferability of the tax credit; Criteria for maintaining eligibility for the tax credit; and The effect of other tax credits on how the Energy Conservation Devices Tax Credit is applied to a dwelling.

In <cite data-doc="COBRA Register Volume 04, Issue 02" data-path="05.01.13">this chapter</cite>, the following terms have the meanings indicated. Terms Defined.“Application system” means the Department’s online tax credit application system. “The Department” means the Baltimore City Department of Finance. “Dwelling” has the meaning stated in <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-31|(a)|(2)">Baltimore City Code Article 28, § 10-31(a)(2)</cite>. “Eligible costs” has the meaning stated in <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-31|(a)|(3)">Baltimore City Code Article 28, § 10-31(a)(3)</cite>. “Energy conservation device” means the following, as defined in these regulations:A solar energy device; or A geothermal energy device. “Geothermal energy device” has the meaning stated in <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-31|(a)|(4)">City Code Article 28, § 10-31(a)(4)</cite>. “Homeowner” has the meaning stated in Maryland <cite data-doc="Md. Code" data-path="gtp|9-105">Tax-Property Article, § 9-105 </cite>(a)(7). “Solar energy device” has the meaning stated in <cite data-doc="City of Baltimore, Md., Code" data-path="|28">City Code Article 28</cite>, § 10-31(a)(7). “Tax credit” means the Energy Conservation Devices tax credit described in <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-31">City Code Article 28, § 10-31</cite>.

In General. In accordance with <cite data-doc="City of Baltimore, Md., Code" data-path="|28|§10-31">City Code Article 28, § 10-31</cite>, the Department shall grant the tax credit against the City property tax imposed on a dwelling to which a solar energy device or geothermal energy device is:Installed; and In use. Amount.The Department shall ensure the amount of the tax credit is the lesser of:Fifty percent of an eligible cost up to a maximum of $5,000; or Fifty percent of an eligible cost up to a maximum of $1,500, if the energy conservation device is installed exclusively to provide hot water for use in the dwelling. The Department shall ensure the amount of the tax credit applied in a tax year does not exceed the property tax imposed on the dwelling in that tax year.

The Department shall ensure the eligibility term of the tax credit is one tax year. The Department may not issue the tax credit until the tax credit application is approved. A homeowner shall be liable for applicable taxes due prior to receiving the tax credit.

Homeowner Eligibility. A homeowner shall be eligible for the tax credit if the homeowner:Obtains an energy conservation device through:Purchase; or Lease. Files a Maryland state income tax return as a resident of Baltimore City for the taxable year for which the tax credit is sought; and Submits a timely and complete application in accordance with <cite data-doc="COBRA Register Volume 04, Issue 02" data-path="05.01.13.07">Regulation .07 of this chapter</cite>. Dwelling Eligibility.To be eligible for the tax credit, a homeowner shall ensure a dwelling is:Located within the City of Baltimore; and The homeowner’s principal residence. The Department may deem a dwelling for which an application has been approved eligible for the tax credit starting with the first full-year tax bill issued after the date of the submission of a complete application.

A cost associated with installing an energy conservation device is incurred on the date that the cost became due. An applicant shall present documents showing that the cost was associated with installation of the energy conservation device and the date of installation.

To apply for the tax credit, a homeowner shall:Submit a complete application electronically via the application system located on the Department’s website within 12 months of incurring the eligible cost; and Include copies of the following with their application:Documentation showing the date of the acquisition and the date of the installation of the energy conservation device including a:Receipt; Paid invoice; Canceled check; or Lease agreement; A notarized affidavit stating that:The property is the homeowner’s principal residence; The property is expected to be occupied by the homeowner for more than six months of a 12-month period beginning with the date of finality for the tax year for which the credit is sought; and The costs submitted by the homeowner are related to the installation of the energy conservation device; A picture of the installed energy conservation device, including device labels. The homeowner shall be responsible for ensuring a working internet connection for the duration of application submission.

If a property is sold, the Department shall automatically transfer the credit to a subsequent homeowner, if the transfer occurs within the one-year credit eligibility period. The subsequent homeowner shall ensure that the requirements of <cite data-doc="COBRA Register Volume 04, Issue 02" data-path="05.01.13.09">Regulation .09</cite> are met for a transferred credit.

To remain eligible for the tax credit throughout the one-year period for which the credit is granted, the homeowner shall ensure:The property continues to be the homeowner’s principal residence; and The energy conservation device remains in use. If a property does not meet the continuing eligibility requirements, the Department shall remove the tax credit from the property’s account.

The Department shall make the calculation of the tax credit prior to the application of another tax credit awarded to the property under the Maryland State Tax-Property Article, §§ <cite data-doc="Md. Code" data-path="gtp|9-221">9-221</cite> and <cite data-doc="Md. Code" data-path="gtp|9-229">9-229</cite>. The Department shall calculate this tax credit after:The application of a tax credit awarded to the property under Maryland Tax-Property Article §§ <cite data-doc="Md. Code" data-path="gtp|9-104">9-104</cite> and <cite data-doc="Md. Code" data-path="gtp|9-105">9-105</cite>; and A real property tax credit other than the tax credits specified in <cite data-doc="COBRA Register Volume 04, Issue 02" data-path="05.01.13.10|A.">Regulation .10(A)</cite>.

When combined with other tax credits, the Department shall ensure the tax credit does not exceed the amount of City real property tax liability on the dwelling in that tax year. The Department may not award more than one tax credit authorized under Art. 28, §10-31 to a single dwelling.