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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 DEADLINE EXTENDED TO APRIL

(American Recovery and Reinvestment Act of 2009 & Workers, Homeownership and Business Assistance Act of 2009)

President Barack Obama signed the "American Recovery and Reinvestment Act of 2009" law on February 17, 2009 and extended it on November 7, 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?

Extended deadline! You have to submit a contract on your home by ~~November 30, 2009~~ April 30, 2010.

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 as 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 $125,000 and couples with an annual income of less than $225,000. A partial credit may be available to individuals with an annual income between $125,000 and $145,000, and couples with an annual income of $225,000 to $245,000.
You must submit a contract on a house between January 1, 2009 and April 30, 2010. (Note: Settlement must occur before July 1, 2010.)
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 new legislation for this year. 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.
Read the bill yourself.

Federal Homebuyer Tax Credit: Current Homeowners

American Recovery and Reinvestment Act of 2009 & Worker, Homeownership and Business Assistance Act of 2009

This credit is part of the federal stimulus bill, signed by President Barack Obama on February 17, 2009 and extended on November 7, 2009. The Federal Homebuyer Tax Credit for Current Homeowners is a credit of up to $6,500 for qualified homeowners purchasing a new home.

There is a deadline! You must have a written binding contract to purchase by April 30, 2010. You will then have until July 1, 2010 to settle on your house.

Current Homeowner Credit Details:

The tax credit is calculated as $6,500 or 10% of the home purchase price, whichever is less. This means a homebuyer can receive a $6,500 tax credit if the home sales price is $65,000 or more. If the home costs less than $65,000, they can receive a credit of 10% of the purchase price. (Ex. Buying a $50,000 home could earn you a $5,000 credit.)
The tax credit is available to current homeowners who have used the home they are selling as their principal residence consecutively for 5 of the previous 8 years.
The credit is available on home purchases between November 7, 2009 and April 30, 2010. For the purposes of this tax credit, a signed contract must be in effect by April 30, 2010; settlement must occur before July 1, 2010.
The home purchase price must be less than $800,000.
The home purchase must be for a primary residence only.
The tax credit is not a loan and does not require repayment. However, if the home is sold within 3 years, the entire tax credit must be re-paid.
There are income restrictions on this credit. You do not qualify for the full tax credit if a) you are single and make $125,000 or more, or b) are married and make $225,000 or more. Partial credit may be awarded to singles making between $125,000 and $145,000 and couples making between $225,000 and $245,000. See the below charts for these estimated partial credits.

Individuals with income between $125,000 and $145,000

Income Estimated Tax Credit
$130,000 - $4875
$135,000 - $3250
$140,000 - $1625

Couples with income between $225,000 and $245,000

Income Estimated Tax Credit
$230,000 - $4875
$235,000 - $3250
$240,000 - $1625

This tax credit is claimed on your federal income tax return. Purchasers must attach documentation of purchase to tax return. You can file amend your 2008 federal income taxes for a 2009 purchase amend your 2009 tax return for a 2010 purchase (with a 1040X form) to claim the money after purchase. Please consult your tax professional about this option.

Because this is a new tax credit, it is recommended that you speak with a tax professional to understand your financial obligations and filing requirements.

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:

City of Baltimore, Department of Finance
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 more information, contact:

City of Baltimore, Department of Finance
Ms. Helena Napper
Phone: 443.984.3499
Email: Helena.Napper@baltimorecity.gov
Website: www.baltimorecity.gov/government/finance/taxincentives.php

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

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: http://www.energy.gov/taxbreaks.htm