606 Eaton St- What will the 10 year CHAP tax credit save the buyer?
If you are a buyer in Baltimore City, you are probably aware of the CHAP tax credit that most knowledgeable builders are making use of. The trouble is that most buyers don’t understand the math behind the credit. 606 Eaton is a newly listed CHAP renovation in Brewers Hill. Here is a good example of how the credit works.
606 Eaton St was purchased in the winter of 2016. Before anything is done to the property, the appraiser from the CHAP office comes to put a value on the property. The pre-improvement appraisal amount for this property came in at $165,000.00. The pics below are before the builder started the renovation:
After the renovation was completed the CHAP appraiser comes back for the Post-improvement appraisal. The house turned out beautiful, see the pictures below. The post-improvement appraisal amount came in at $365,000.00.
CHAP tax credits: Here is the math breakdown:
CHAP appraisal before renovation is 165k
CHAP appraisal after renovation is 365k.
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 350k.
Normal tax bill for the city portion is 350k x 2.32 = $8120/year ($676.67/month)
CHAP credit is $4640/year
TOTAL AMOUNT OF CITY TAX $8120 – $4640 = $3,480.00 ($290/month)
Buyer will save about $386.67 a month!
***These numbers are good estimates but not exact.
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 atsuzie@CrabbyHomes.com or the cell number in the banner below.
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