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The Maryland Homeowner’s Property Tax Program

Most homeowners know about the Homestead Program; most homeowners do not know about the Maryland Homeowners’ Property Tax Credit Program. This article answers many of the common questions we hear from Maryland homeowners regarding property taxes.

What is the Maryland Homeowners’ Property Tax Credit Program?
The Homeowners’ Property Tax Credit Program allows credits against the homeowner’s property tax bill if the property taxes exceed a fixed percentage of the person’s gross income.

Does Maryland Have a Senior Citizen Property Tax Credit as well?

Unlike the District of Columbia, Maryland does not have offer Senior Citizen Tax Credit, instead the Homeowners’ Property Tax Credit has no age requirements, just income requirements.

What are the requirements for eligibility?
The four basic requirements include:

1.    In order to apply for the credit, you must own the property.
2.    The property must be your principal residence.
3.    Your net worth must be less than $200,000.00.
4.    Your combined gross household income cannot exceed $60,000.00.

How is “principal residence” defined?
For the purpose of the Homeowners’ Property Tax Credit, a principal residence is a property where you live at least six months of the year, including July 1. If you are a recent home purchaser, it must be your intention to live at the property as a principal residence. Exceptions are made for individuals unable to live at the property for health or need of special care.

Does the value of the property count towards the “net worth”?
No, the value of the property on which you are seeking the credit does not count towards the net worth. Neither do any qualified retirement savings nor any Individual Retirement Accounts.

What counts toward my “income”?

Income is defined as all household income.  The only exceptions are for dependents or household members that are paying rent or room and board.

How much can be saved?
The tax credit is based upon the amount by which the property taxes exceed a percentage of your income according to the following formula: 0% of the first $8,000 of the combined household income; 4% of the next $4,000 of income; 6.5% of the next $4,000 of income; and 9% of all income above $16,000.

Example
:  If your combined household income is $32,000, your tax limit is $1,860.00. You would be entitled to receive a credit for any taxes above the $1,860.00.

When should you apply?
The Homeowners’ Tax Credit is not automatically granted and you must apply every year by no later than September 1 on a standard application supplied by the Department of Assessments and Taxation. However, it is to your advantage to submit the application by May 1 so that any credit due you can be deducted beforehand from the initial July tax bill.

How do I get the application?
Just follow this link: http://www.dat.state.md.us/sdatweb/HTC-60.pdf

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