Homeowner Tax Incentives
These programs can help ease the burden of property taxes for eligible homeowners. We've listed some of the most common tax credit programs here. More can be found through the Baltimore City Department of Finance's website at www.baltimorecity.gov/government/finance/taxincentives.php.
Arts & Entertainment District Property Tax Credit
A 10-year property tax credit for renovated buildings that provide live-work space for artists and/or space for arts and entertainment enterprises:
The property tax credit is prorated to reflect the proportion of a rehabbed building that is used by a resident artist or A&E enterprise. The credit only applies to improvements made to the property. To calculate the credit, multiply the improved amount of assessed value of the property by the below percentages to come up with the amount of assessed value eligible for a credit. This number can then be multiplied by the current tax rate to equal the dollar amount of the credit.
- 80% for the 1st 5 taxable years;
- 70% for the 6th taxable year;
- 60% for the 7th taxable year;
- 50% for the 8th taxable year;
- 40% for the 9th taxable year;
- 30% for the 10th taxable year.
Property owners renovating live-work spaces in an A&E district can contact the MD State Department of Assessments and Taxation to determine the building’s eligibility. Within 90 days following receipt of a tax assessment, property owners must file a tax credit application with the City’s Department of Finance. Property owners must annually re-certify that the building is being used in compliance with the property tax credit. Full instructions and tax credit applications can be found at www.baltimorecity.gov/Government/AgenciesDepartments/Finance/TaxCredits.aspx.
Home Improvement Property Tax Credit
This program was designed to provide an incentive to make improvements to residential properties.
What are the benefits?
A 5-year tax credit with 100% relief in the first taxable year for the property taxes on the increased value of your property due to improvements; the credit declines by 20 percentage points each year thereafter.
What else do I need to know?
- Improvements cannot exceed $100,000.
- The owner must occupy the property for more than 6 months each year.
- The assessed value of your property must increase due to the improvements you make.
- This property tax credit limits the value of the improvements that are eligible for the credit.
For more information, contact:
Baltimore City Bureau of Revenue Collections Call Center
Phone: 410.396.3971
Email: baltimorecitycollection@baltimorecity.gov
Website: www.baltimorecity.gov/government/agenciesdepartments/finance/taxcredits.aspx
Homeowner's Tax Credit
This State of Maryland program sets a limit on the amount of property taxes any homeowner must pay based upon his or her income.
What are the benefits?
The tax credit is based upon the amount by which the property taxes exceed a percentage of your income. For a chart of credits, go to www.dat.state.md.us/sdatweb/htc.html
What else do I need to know?
- Your combined gross household income cannot exceed $60,000.
- You must own or have a legal interest in the property.
- The dwelling on which you are seeking the tax credit must be your principal residence where you live at least six months of the year, including July 1.
- Your net worth, not including the value of the property on which you are seeking the credit or any qualified retirement savings or Individual
- Retirement Accounts, must be less than $200,000.
- You must apply every year by no later than September 1 on a standard application supplied by the Department of Assessments and Taxation.
For more information, contact:
State Department of Assessments & Taxation
Homeowners' Tax Credit Program
301 W. Preston Street, Room 900
Baltimore, Md. 21201-2395
Phone: 410.767.4433 or 1.800.944.7403
Website: www.dat.state.md.us/sdatweb/htc.html
Homestead Property Tax Credit
To help homeowners deal with large assessment increases on their principal residence, state law has established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage.
What are the benefits?
This is a credit calculated on any assessment increase exceeding 4% (Baltimore City's cap) from one year to the next. In other words, the homeowner pays no property tax on the market value increase which is above the limit.
What else do I need to know?
- To prevent improper granting of this credit on rented or multiple properties of a single owner, a new law was enacted in 2007 that requires all homeowners to submit a one-time application to establish eligibility for the credit. The application form will be included in the assessment notice mailed to one-third of the homeowners at the end of December in 2007, 2008 and 2009. It also will be mailed to new purchasers of residential property.
- The dwelling must be the owner’s principal residence and the owner must have lived in it for at least six months of the year, including July 1 of the year for which the credit is applicable.
For more information, contact:
Department of Assessments and Taxation
Homestead Tax Credit Division
301 West Preston Street, 8th Floor
Baltimore MD 21201
Phone: 410.767.2165 or 410.396.3987
Website: www.dat.state.md.us/sdatweb/homestead.html or www.baltimorecity.gov/government/finance/taxincentives.php
Green Tax Credits – Federal Programs
There are federal tax credits available for homeowners who make green choices with their renovating and purchasing decisions.
Home Energy Efficiency Improvement Tax Credits
Homeowners who buy specific products to improve energy efficiency in their current homes can receive a 30% tax credit for purchase of these qualifying goods, up to $1,500. The materials must be purchased and installed from January 1, 2009 through December 31, 2010. Examples include: energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment. See EnergyStar.gov for a complete summary of energy efficiency tax credits available to consumers.
Residential Renewable Energy Tax Credits
Homeowners who install renewable energy systems for their homes can receive a 30% tax credit for systems placed in service before December 31, 2016. Eligible systems include solar energy, wind, microturbine, geothermal heat pumps, and residential fuel cells.
Website: www.energy.gov/taxbreaks.htm
Green Tax Credits – State of Maryland Programs
The State of Maryland has certain incentives for homes and residential projects that utilize renewable energy for their heating and cooling needs.
Website: energy.maryland.gov/incentives/residential/
Newly Constructed Dwelling Tax Credit
This credit applies to newly constructed dwellings for which building permits were issued on or after October 1, 2004.
What are the benefits?
- A five-year City real property tax credit of 50% in the first taxable year and declining by 10 percentage points thereafter.
What else do I need to know?
- The credit only applies to the first owner of a newly constructed dwelling. The credit cannot be transferred to subsequent owners.
- The owner must occupy the home as their principal residence for the entire 5 year credit period.
- The owner must fill out an application for this tax credit within 90 days of settlement or within 90 days of receiving the first tax assessment notice.
**Baltimore City Council has just approved an amnesty period for the Newly Constructed Dwelling Property Tax Credit. Homeowners who settled after October 1, 1994 and who missed the 90-day filing period have until August 28, 2009 to file for this credit! For more information, go to www.baltimorecity.gov/government/finance/taxincentives.php and click on “Newly Constructed Dwelling Property Tax Credit.”
For more information, contact:
Baltimore City Bureau of Revenue Collections Call Center
Phone: 410.396.3971
Email: baltimorecitycollection@baltimorecity.gov
Website: www.baltimorecity.gov/government/agenciesdepartments/finance/taxcredits.aspx
Renter's Tax Credit
The Renters' Tax Credit Program is a plan that provides property tax credits for renters who meet certain requirements.
If you are age 60 or over or 100% disabled, or if you are under the age of 60 who has at least one dependent under the age of 18 living with you AND you did not receive federal or state housing subsidies or reside in public housing, you may be eligible for this program.
What are the benefits?
- The plan is designed to be similar in principle to the Homeowners' Tax Credit Program. The concept rests on the reasoning that renters indirectly pay property taxes as part of their rent and thus should have some protection, as do homeowners.
- If the portion of rent attributable to the assumed property taxes exceeds a fixed amount in relation to income, the renter can, under specified conditions, receive a credit of as much as $750.
What else do I need to know?
The rented dwelling may be an apartment in an individual house or any type of apartment building, duplex, co-op, condominium, house trailer, or mobile home pad.
The dwelling must be the principal residence in Maryland and the renter must live there at least six months of the year.
The applicant must have a bona fide leasehold interest in the property and be legally responsible for the rent.
Income charts and tax limit charts can be found online at www.dat.state.md.us/sdatweb/rtc.html to help you determine eligibilty.
You must apply every year by no later than September 1 on a standard application supplied by the Department of Assessments and Taxation.
For more information, contact:
State Department of Assessments & Taxation
Renters' Tax Credit Program
301 W. Preston Street, Room 900
Baltimore, Maryland 21201-2395
Phone: 410.767.4433 or 1.800.944.7403
Website: www.dat.state.md.us/sdatweb/rtc.html
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