You may have recently heard or read about the Maryland State Homeowner's Homestead Tax Exemption. But, you may not know if it applies to you.
As part of my community outreach, I have been talking about this to my friends, family and clients to make sure that everyone knows about this deadline and files.
About 35% of those I talk to are not aware of this new requirement. That means they could get quite a surprise when they receive their 2013 property tax bill and see their property taxes go up hundreds or thousands of dollars.
What is the Homestead Tax Credit?
This special tax credit limits the amount that your property taxes can increase per year, based on your county. It is for all Maryland homeowners living in their principal residence. Do not confuse this exemption with the income-restricted homestead tax limitation. This Homestead Tax Credit is not income-derived nor is it age-based.
Prior to 2008, homeowners were grand-fathered in to the program and did not have to do anything to receive this credit.
But the law passed in 2007 now requires that you file a one-time application in order to continue receiving the reduced property tax credit on your principal residence. This exemption limits the amount that your property taxes can increase every year.
If you own your home and reside in Maryland as your principal residence, you may need to file for this exemption even if you have received it automatically in the past.
The State has set the final filing deadline of December 31, 2012 in order for homeowners to retain their lower property tax rate.
What happens if you miss the deadline?
If you don’t file the application by the deadline, you will lose this exemption and your property taxes will increase to the new state assessed value and you'll lose the cost-control cap. The State of Maryland has a 10% increase per year cap. Then, each county has their own cap on increases. For example:
- Anne Arundel County, 2%
- Annapolis City, 10%
- Baltimore City, 4%
- Baltimore County, 4%
- Calvert County, 10%
- Montgomery County, 10%
- Prince Georges County, 5%
- Queen Anne County, 5%
Without this cap, your taxes will adjust to the new assessed value and could be more than a 30% change over what you have been paying, depending on your home's value and how long you've been in place. This could add up.
What you need to do if your primary home is in Maryland:
If you've filed since 2008, you don't need to do anything else personally. If you have filed recently, your application may still be in process. (It is taking the State about 90 days to process the applications. They are matching every application against the State of Maryland driver & voter registration database using submitted social security numbers to verify residency.)
There are several ways to file:
a. File electronically: Request an application from the Department by sending an email to Hcredit@dat.state.md.us
The application mailed out to you will contain an Access Number so you may file electronically on the State's site at https://sdathtc.resiusa.org/homestead
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.
c. Fax the application: You may also fax in the completed paper application to the Department at 410-225-9344. (Emailed applications will not be accepted.)
Department of Assessments and Taxation
Homestead Tax Credit Division
301 West Preston Street, 8th Floor
Baltimore MD 21201 Contact the Homestead Division
Request an application: Hcredit@dat.state.md.us
If you cannot remember if you filed or need further clarification, give me a call at 443-837-5645. I'm here to help.