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/AgenciesDepartments/Finance.aspx.

• Arts & Entertainment District Property Tax Credit
• Home Improvement Property Tax Credit
• Homeowner's Tax Credit
• Homestead Property Tax Credit
• Green Tax Credits - Federal Programs
• Newly Constructed Dwelling Tax Credit
• Renter's Tax Credit

Arts & Entertainment District Property Tax Credit

This program is designed to encourage the renovation of buildings for use by artists or arts and entertainment enterprises by lessening the financial burden on property owners. Baltimore City currently has two Arts and Entertainment (A&E) Districts: Station North (designation effective by the State of Maryland on July 1, 2002) and Highlandtown (designation effective by the State of Maryland on July 1, 2003.

What are the benefits?

• 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.

For more information:

Department of Finance
454 City Hall
Baltimore, MD 21202
Email: deptoffinance@baltimorecity.gov

Home Improvement Property Tax Credit

What are the benefits?

This program was designed to provide an incentive to make improvements to residential properties lessen the financial burden on property owners. This property tax credit limits the value of the improvements that are eligible for the credit; for instance, the credit does not apply to the value of improvements to the dwelling that exceed $100,000. Ownership of the property is transferred; the purchaser is eligible for the remainder of the property credit. The program provides a 5-year tax credit with 100% relief from your city property tax increase the first taxable year; the credit declines by 20 percentage points thereafter. However, the credit applied only to the increased value of the dwelling due to the improvements. This credit automatically renews annually for five years as long as the property remains in compliance with the Housing Code.

What 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:

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

What are the benefits?

The State of Maryland has developed a program which allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. For a chart of credits, go to www.dat.state.md.us/sdatweb/htc.html

What 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:

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

What are the benefits?

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. 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.
View a listing of homestead caps for Baltimore City.

What 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 homeowner’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:

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/AgenciesDepartments/Finance/TaxCredits.aspx

Green Tax Credits – Federal Programs

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.

For more information:

1000 Independence Ave. SW
Washington DC 20585
202.586.5000
Website: energy.gov/savings/residential-renewable-energy-tax-credit

Newly Constructed Dwelling Tax Credit

What are the benefits?

This program was designed to encourage the construction and purchase of new homes in the city. The program provides a five-year City real property tax credit (50% in the first taxable year and declining by 10 percentage points thereafter) on newly constructed or substantially rehabilitated dwellings if the property has not been previously occupied by owner or tenant since its construction or rehabilitation. In order for a substantially rehabilitated dwelling to be eligible for this credit, it must contain no more than four dwelling units and have been cited by the City’s Department of Housing and Community Development as being vacant and abandoned for more than one year or been owned by the Mayor and City Council of Baltimore for one year and in need of substantial repair to comply with applicable City codes. This tax credit is non-transferable and only applies if the owner is the first party to purchase the newly constructed dwelling after its completion.

What 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 homeowner 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.

For more information:

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

What are the benefits?

The Renters' Tax Credit Program is a plan that provides property tax credits for renters who meet certain requirements. 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 do I need to know?

• 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.
• If you are a renter under the age of 60 who, during 2010, had 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 AND the combined income of all residents of your dwelling is below the following guidelines, you are encouraged to apply.
• If you are a renter under the age of 60 who, during 2010, had 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 AND the combined income of all residents of your dwelling is below the following guidelines, you are encouraged to apply.
• 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 eligibility.
• 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:

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