Legal Bulletins
It's Not Too Late!!! To Preserve Your Right to the Homestead Property Tax Credit, You Must File With the SDAT Immediately
In 2007, the Maryland General Assembly enacted a law (Chapters 564 and 565 of the Laws of Maryland of 2007) that requires all homeowners to timely submit a one-time application with the Maryland State Department of Assessments and Taxation (“SDAT”) to establish their right to the Homestead Property Tax Credit.
For homeowners who purchased their dwellings before January 1, 2008, failure to file an application by the end of this year will cause you to lose the credit for the 2013/2014 real property tax year and thereafter, unless you file for reinstatement (which would not take effect until the following year).
People who bought their homes on or after January 1, 2008, must file their applications by the first July 1 after their deeds are dated or recorded. See Maryland Code, Tax-Property Article, Section 9-105(d)(6).
To help homeowners deal with large assessment increases on their principal residences, Maryland established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year. The limit is 4% in Baltimore City and Baltimore County. This break can add up to considerable savings. In Baltimore City alone, thousands of homeowners had at least one-half of their property taxes forgiven by the homestead credit this tax year.
Technically, the Homestead Credit does not limit the market value of the property as determined by the SDAT. Instead, it is a credit calculated on any assessment increase exceeding 10% (or the lower cap enacted by the local governments) from one year to the next. The credit is calculated based on the 10% limit for purposes of the State property tax, and 10% or less (as determined by local government) for purposes of local taxation. In other words, the homeowner pays no property tax on the market value increase which is above the limit.
The Homestead Tax Credit only applies to principal residences, not rental or vacation properties. A person may claim the Homestead Tax Credit for only one dwelling, and to claim the credit, the homeowner must actually reside in the house by July 1 of the taxable year for which the property tax credit is allowed. The 2007 law was passed to prevent improper granting of this credit on rented or multiple properties of a single owner.
To submit a Homestead Tax Credit Eligibility Application through the SDAT website, you must be issued an application form by the SDAT containing an Access Number and your Real Property Account Number. You need the Account and Access Numbers as part of the submission process. The Access number is in the box in the upper right corner of the application form mailed to you by the SDAT.
The application form was included in the assessment notice mailed to one-third of the homeowners at the end of December in each of 2008, 2009 and 2010, as their assessments came up for renewal. Homeowners received their credits through December 31, 2012, via a grace period. However, to continue to receive the credits, you must file an application by December 31, 2012.
For homeowners who purchased their dwellings before January 1, 2008, failure to file an application by the end of this year will cause you to lose the credit for the 2013/2014 real property tax year and thereafter, unless you file for reinstatement (which would not take effect until the following year).
People who bought their homes on or after January 1, 2008, must file their applications by the first July 1 after their deeds are dated or recorded. See Maryland Code, Tax-Property Article, Section 9-105(d)(6).
To help homeowners deal with large assessment increases on their principal residences, Maryland established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year. The limit is 4% in Baltimore City and Baltimore County. This break can add up to considerable savings. In Baltimore City alone, thousands of homeowners had at least one-half of their property taxes forgiven by the homestead credit this tax year.
Technically, the Homestead Credit does not limit the market value of the property as determined by the SDAT. Instead, it is a credit calculated on any assessment increase exceeding 10% (or the lower cap enacted by the local governments) from one year to the next. The credit is calculated based on the 10% limit for purposes of the State property tax, and 10% or less (as determined by local government) for purposes of local taxation. In other words, the homeowner pays no property tax on the market value increase which is above the limit.
The Homestead Tax Credit only applies to principal residences, not rental or vacation properties. A person may claim the Homestead Tax Credit for only one dwelling, and to claim the credit, the homeowner must actually reside in the house by July 1 of the taxable year for which the property tax credit is allowed. The 2007 law was passed to prevent improper granting of this credit on rented or multiple properties of a single owner.
To submit a Homestead Tax Credit Eligibility Application through the SDAT website, you must be issued an application form by the SDAT containing an Access Number and your Real Property Account Number. You need the Account and Access Numbers as part of the submission process. The Access number is in the box in the upper right corner of the application form mailed to you by the SDAT.
The application form was included in the assessment notice mailed to one-third of the homeowners at the end of December in each of 2008, 2009 and 2010, as their assessments came up for renewal. Homeowners received their credits through December 31, 2012, via a grace period. However, to continue to receive the credits, you must file an application by December 31, 2012.
The following is from the SDAT’s website:
How do I file the Homestead Eligibility Application?
a. File electronically: The application mailed out to you will contain an Access Number so you may file electronically on our site at https://sdathtc.resiusa.org/
b. Mail the application: You may mail in the completed paper application the Department sends you. You may also print and mail the completed PDF copy of the application available on our web site. Applications must be postmarked by December 31, 2012.
c. Fax the application: You may also fax in the completed paper application to the Department at 410-225-9344.
Mail completed application to:
Department of Assessments and Taxation
Homestead Tax Credit Division
301 West Preston Street, 8th Floor
Baltimore MD 21201
Contact the Homestead Division
Telephone: 410-767-2165
1-866-650-8783
Fax: 410-225-9344
If you have questions about this, please contact the Gordon Feinblatt attorney with whom you regularly deal, Ed Levin at (410) 576-1900 elevin@gfrlaw.com, or Jeff Spatz at (410) 576-4124 jspatz@gfrlaw.com.