ANNAPOLIS, Md. — As property values soar, a little-known tax credit is saving homeowners significant amounts of money. It's called the Homestead Tax Credit. This one-page, one-time application is not income-based, yet thousands of Marylanders have yet to apply.
“This is my first house, and I did not expect this. I really did not expect this,” said Edith Canty, a homeowner in Baltimore County, who experienced a spike in her property taxes. The Maryland State Department of Assessments and Taxation recently reassessed Canty’s property, increasing its value by 63 percent.
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“This jump is like I'm juggling other bills just to make sure that this mortgage is paid, and we can stay in our house, because I don't want to lose my house. I love my house,” Canty expressed.
Canty reached out to WMAR-2 News’ Mallory Sofastaii, seeking advice on how to reduce her tax burden. Sofastaii discovered that Canty was not receiving the Homestead Tax Credit, a program that limits how much an owner can be taxed on their principal residence. In Maryland, the increase in taxes on property values is capped at 10 percent. However, it could be less depending on where you live. In Baltimore County, where Canty resides, the cap is even lower at 4 percent. While her home was assessed at $198,000, the tax credit would allow her taxes to be based on a valuation of $137,000, saving her over $1,400 over three years.
“We didn't know it was out there. Had we known, we would have applied for it a long time ago,” Canty remarked.
She is certainly not alone. WMAR-2 News found that the majority of homes recently reassessed do not receive the Homestead Tax Credit. According to the Maryland State Department of Assessments and Taxation (SDAT), of the 610,683 Group 1 residential properties recently assessed, 257,451 have a Homestead Tax Credit on file. This means that approximately 353,232 properties, or around 58 percent, do not. However, not all of these properties may be eligible for the tax credit, which is only applicable to the owner's principal residence.
“We have done a lot of outreach to try and make sure that people apply, but for various reasons, some people don't,” said Dan Phillips, the director of SDAT.
Phillips emphasized their commitment to ensuring eligible residents receive this credit. They have implemented strategies such as including information in settlement paperwork and mailing out details along with reassessment notices.
“The goal is to make sure that every homeowner gets to stay in their home,” Phillips stated.
Rising property values
With property values rising dramatically over the past three years, programs like these are crucial in keeping costs manageable. For example, in Talbot County, the county's taxable increase is capped at zero percent.
“So people are still paying property taxes based on what their assessment was from the 1990s and that's a tremendous benefit for those property owners,” Phillips noted.
Homeowners can also appeal their property assessments if they disagree with the valuations.
“The property owner should bring any information they have about why they think the property value is different to be able to present it, be that sales of properties that have occurred nearby, something about the condition of their property, but they should be prepared to bring that to present it to the assessor,” Phillips advised.
In addition, there are income-based tax credits, such as the Homeowners’ Property Tax Credit and the Renters’ Tax Credit, which provide tax relief to individuals with limited incomes. Homeowners must apply each year, and the credit recently became retroactive for the last three years for those aged 70 and over. However, the Homestead Tax Credit is not retroactive, meaning the sooner homeowners apply, the greater their long-term savings—something Canty wishes she had known when she moved in.
“Make sure that you know how much the home costs, what the property value is, how much taxes you're paying. I mean, because in the end, if you don't, it's going to be your own undoing. And if there are programs out there like this that can help somebody, I would recommend that they take advantage of it,” said Canty.
Tax credit application deadlines
The deadline for Group 1 property owners to appeal their assessments is February 13. If an owner discovers they do not have a Homestead Tax Credit application on file, they have until May 1 to apply for the credit, which will be applied to their July 1 tax bill.
The deadline to apply for the Homeowners’ and Renters’ property tax credits is this fall, but applying by April 15 will ensure the credit is reflected on your July tax bill.
To check if your property has a Homestead Tax Credit on file, click here, search by your property's address and scroll down to the bottom to see if if there's a Homestead Tax Credit application on file. And for more information regarding the property assessment appeals process, click here.
If you’re struggling to afford your property taxes, you may qualify for the Homeowner Protection Program. Click here for details on the eligibility requirements.