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.

BRAND NEW! Federal Homebuyer Tax Credit
(American Recovery and Reinvestment Act of 2009)

H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the U.S. House of Representatives on February 13, 2009. Later that day, the U.S. Senate also passed the bill. President Barack Obama signed the bill on February 17, 2009. One of the provisions of the bill is the Federal Homebuyer Tax Credit.
What are the benefits?
You can receive an $8,000 tax credit if your home sales price is $80,000 or more. It must be claimed on your tax return.

If your home costs less than $80,000, you can receive a credit of 10% of the purchase price. (Ex. For a $50,000 house, you'd receive a $5,000 credit.)

What else do I need to know?

You must be a first-time homebuyer. You cannot have property in your name anywhere in the U.S. for the past three years to be considered, by federal standards, a 'first-time homebuyer."
Income limits to apply to this credit. The full credit is available to individuals with an annual income of less than $75,000 and couples with an annual income of less than $150,000. A partial credit may be available to individuals with an annual income between $75,000 and $95,000, and couples with an annual income of $150,000 to $170,000.
You must purchase a house between January 1, 2009 and December 1, 2009.
This credit does not have to be repaid if you stay in your home for 3 years or more. If your home is sold within three years of purchase, the entire credit is recaptured.

For more information:
This is very new legislation, so some of the finer points are still being worked out. We recommend you contact your lender, your realtor, or your tax professional for more information on making use of this tax credit.

Information provided by the Greater Baltimore Board of Realtors' affiliation with the National Association of Realtors.

Feel free to read the bill yourself.

Newly Constructed Dwelling Tax Credit

This credit applies to newly constructed dwellings for which building permits were issued on or
after October 1, 1994.

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.
This program will only be applicable for owners who purchase new homes by June 30, 2009. After that time, no new owners will be eligible.

For more information, contact:
City of Baltimore, Department of Finance
Ms. Paula Buchanan
Phone: 443.984.3497
Email: Paula.Buchanan@baltimorecity.gov
Ms. Helena Napper
Phone: 443.984.3499
Email: Helena.Napper@baltimorecity.gov
Website: www.baltimorecity.gov/government/finance/taxincentives.php

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 instance,

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

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

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