03/06/2017 by Suzie Coronel 0 Comments
CHAP tax credits: can you do the math?
CHAP tax credit renovation properties have been saving buyers a substantial amount in taxes for years. These types of Baltimore row homes hold more valuable because of the generous tax break. I did at recent blog titled 10 year CHAP tax credit renovations in Butchers Hill . That blog highlighted 3 CHAP tax credit renovations all in the popular Baltimore neighborhood Butchers Hill. Since that was published all 3 of those active Baltimore City homes for sale are now under contract and set to settle in March 2017.
When explaining the tax credit, most are vegue in the details. When I explain it to Baltimore City buyers, I try to give them round number within my example to keep things easy to calculate.
Here is the example that I tend to use:
CHAP appraisal before renovation is 100k
CHAP appraisal after renovation is 300k.
The "locked in" credit is 200k x 2.32 = $4640.00/year in taxes ($386.67/month)
So let’s say the state’s assessment after renovation is 290k.
Normal tax bill for the city portion is 290k x 2.32 = $6,728/year
CHAP credit is $4640/year
TOTAL AMOUNT OF CITY TAX $6728 – $4640 = $2088.00
When purchasing a CHAP tax credit house it is important to get the CHAP appraised amounts so that you can calculate the taxes that the buyer will be paying. The above example should help you calluclate but in the event you still have questions, please contact Suzie Coronel at suzie@CrabbyHomes.com or the cell number in the banner below.