Maryland Homestead Tax Credit

The Homestead Property Tax Credit, which limits property tax increases on owner-occupied residences, has been automatically granted to Maryland residents since 1977, but under a law passed by the Maryland General Assembly last year, taxpayers now must submit a one-time application to continue receiving the credit. The change was made to prevent taxpayers from using the credit on multiple residences such as vacation homes and rental properties.

Property owners who use the property as their principal residence will receive an assessment notice containing a Homestead Tax Credit Application for the first time this year beginning January 1, 2008. This one-time application must be submitted in order to insure that the credit is granted only on eligible properties and not on properties that are rented or used as vacation homes. The applications can be filed on-line here on the Department’s website or by mailing the paper form in the postage paid envelope included in the assessment notice. Homeowners not reassessed until 2009 or 2010 can wait until then to submit a Homestead Tax Credit application.

An application to continue receiving the Homestead Property Tax Credit is available at https://sdathtc.resiusa.org/homestead.

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Tax credit conditions


The Homestead Property Tax Credit is available to all property owners on their principal residence as long as the following conditions were met during the previous tax year, according to the Maryland State Department of Assessments and Taxation's Web site:


· The property was not transferred to new ownership.


· There was no change in zoning classification requested by the homeowner resulting in an increased value of the property.


· A substantial change did not occur in the use of the property.


· The previous assessment was not clearly erroneous.


· The owner must have lived in the residence for at least six months of the year, including July 1 of the year for which the credit was applicable, unless the owner temporarily was unable to do so by reason of illness or special care.

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Further details: http://www.dat.state.md.us/sdatweb/Homestead_app.htm