Relating to Real Estate

We have previously written about the Maryland homestead property tax credit and the requirement to make a filing with the Maryland State Department of Assessments and Taxation in order to preserve the right to the credit. See Gordon Feinblatt’s Legal Bulletins entitled “To Preserve Your Right to the Homestead Property Tax Credit, You Must File with the SDAT” dated April 9, 2012  and “It’s Not Too Late!!! To Preserve Your Right to the Homestead Property Tax Credit, You Must File with the SDAT Immediately” dated December 27, 2012. The law had provided that the credit would be lost for anyone who did not file by December 31, 2012.
Because many eligible homeowners did not file in time, the Maryland General Assembly passed emergency legislation to extend the filing deadline until December 31, 2013. That law, Senate Bill 158 or Chapter 25 of the Laws of Maryland of 2013, became effective when Governor O’Malley signed it on April 9, 2013.
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 law 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.
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. An amendment to the Homestead Tax Credit law was passed in 2007 to prevent improper granting of this credit on rented or multiple properties of a single owner.
For more information on how to apply for the credit, or to check whether you have already applied, visit the Maryland Department of Assessments and Taxation website.
For questions about this, please contact Ed Levin at (410) 576-1900 or Jeff Spatz at (410) 576-4124.