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The Homestead Credit (& How to Apply)
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If a house is your primary residence, you may be eligible to take the homestead credit. The homestead credit limits the amount of your property assessment that you can be taxed on. By state law, the maximum amount your taxable assessment can increase from one year to the next is ten percent. If your house is assessed at $100,000 this year, the highest your taxable assessment could be next year would be $110,000, even if the property's value increases at a faster rate. Individual counties may set the maximum increase at a lower percentage. In Baltimore City and Baltimore County, assessments are capped at a four percent increase per year. Anne Arundel County is capped at two percent. Carroll, Harford and Howard are capped at five percent each (although individual towns and cities in Carroll and Harford have different caps. Find a complete list of homestead caps for Maryland jurisdictions here (the percentage listed is the current amount plus the allowed increase, so 104 would be a four percent increase). Each jurisdiction can change their cap by law at any time, as long as it doesn't exceed ten percent.
Up until 2007, this credit was given to the homeowner automatically. There was, however, concern that some homeowners were receiving this credit on investment properties that were not eligible. So in 2007, Maryland passed a requirement that a homeowner must make a one-time application to receive this benefit. The average homeowner who fails to apply will lose $1500.00 a year. The actual amount depends on the value of the property, how quickly properties are appreciating in a particular neighborhood and how long a person has owned their home. In some cases, homeowners will lose a lot more if they fail to apply. After just 5 or 10 years, this could add up to tens of thousands of dollars. New homeowners can apply after their deed has been recorded. All other homeowners must apply for this credit by December 31, 2013, or will lose the benefit for the upcoming tax year.
The application form can be sent by mail or fax. A copy of the form can be found here. The form can be faxed to the Department of Assessments and Taxation at 410-225-9344, or mailed to the following address:
Department of Assessments and Taxation
Homestead Tax Credit Division
301 West Preston Street, 8th Floor
Baltimore MD 21201
Applications
can also be filed electronically at https://sdathtc.resiusa.org/homestead.
This option has been temporarily disabled until all applications made
in 2012 have been processed.