With the fiscal cliff looming and members of Congress deadlocked as to how to tackle the imminent economic reality, 65% of Marylanders remain either unaware or inactive in receiving a tax credit that could go a long way in helping subdue the possible pain of higher taxes in 2013.
Dubbed by one Councilwoman as the ‘Use It or Lose It‘ campaign, many local leaders have taken to educating the nearly 25,000 eligible Baltimore City homeowners who have yet to apply for their Homestead Tax Credit. Led by a feisty and persistent East Baltimore council rep, Mary Pat Clarke, officials have called on la-di-dotti and everybody to help inform their neighborhoods, friends and family about a tax break that could save homeowners hundreds, if not thousands, of dollars in the upcoming fiscal year.
The property tax credit, which was passed by the Maryland General Assembly in 2007, is a one-time only filing requirement mandated by state law to reduce the number of ineligible recipients of these coveted tax breaks. Created to help homeowners deal with large assessment increases, the legislation calls on all eligible Maryland residents to have filed for the Homestead Credit by December 31, 2012 – four days from today! The credit essentially caps the increases on owner-occupied properties statewide, yet the level of such varies by locality. The credit is calculated based on the 10% limit for purposes of the State property tax, and 10% or less (as determined by local governments) for purposes of local taxation. In other words, the homeowner pays no property tax on the market value increase which is above the limit.
“In Baltimore, the Homestead Program caps annual assessment increases at 4%, preventing excessive property tax increases from year-to-year,” says Clarke, the council rep for the 14th council district. “Only owner-occupants are eligible, regardless of age, income, property value.”
Looking to prevent improper granting of this credit on rented or multiple properties of a single owner, the law was enacted by the legislature requiring all homeowners to submit a one-time application to establish eligibility for the credit. The conditions set forth for receiving this tax credit require that the dwelling must be the owner’s principle residence, and that he/she must have lived in the property for at least 6-months of the year, unless otherwise predisposed based on a verifiable reason of illness or other special care needs. The credit cannot go to a landlord or to an owner with multiple properties – as its only good for one principal residence.
The tax credit will be granted if the following conditions are met during the previous tax year:
The property was not transferred to new ownership; there was no change in the zoning classification requested by the homeowner resulting in an increase value of the property; a substantial change did not occur in the use of the property; and/or the previous assessment was not clearly erroneous.
An example of the tax credit and what it means:
Assume that your old assessment was $100,000 and that your new phased-in assessment for the 1st year is $120,000. An increase of 10% would result in an assessment of $110,000. The difference between $120,000 and $110,000 is $10,000. The tax credit would apply to the taxes due on the $10,000. If the tax rate was $1.04 per $100 of assessed value, the tax credit would be $104 ($10,000 ÷ 100 x $1.04).
To find out more information on the Maryland Homestead Tax Credit, go to:
Tax Credit Website: http://www.dat.state.md.us/sdatweb/homestead.html
Search to see if your address has been credited at the Real Property Date Search: http://sdatcert3.resiusa.org/rp_rewrite/
Further questions can be forwarded to their offices at: #410-767-2165 or toll-free at: 1-866-650-8783 or email at: firstname.lastname@example.org You can also contact Councilwoman Clarke’s Office for assistance at: #410.396.4814 or email at: MaryPat.Clarke@baltimorecity.gov
A Message from the Office of Councilwoman Mary Pat Clarke:
TO REQUEST YOUR APPLICATION BY EMAIL:
Subject Line: Request for Homestead Application
Text: Please mail my Homestead application to me at:
Be sure to add that your home is “IN BALTIMORE CITY.”
TO REQUEST YOUR APPLICATION BY PHONE: 410-767-2165
Just please apply NOW before it’s too late!
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