Homestead Tax Credit Eligibility Application
Maryland requires all homeowners to submit a one-time application to establish eligibility for the Homestead Tax Credit. The Homestead Tax Credit is needed to ensure that homeowners receive the Homestead credit only on their principal residence. Because of assessment increases and because of the low assessment caps adopted by the county governments, many homeowners in the State have been receiving substantial homestead credits each year on their property tax bills.
What is the Homestead 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. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year.
Example:
Assume that your old assessment was $100,000 and that your new phased-in assessment for the 1st year is $120,000. An increase of 10% would result in an assessment of $110,000. The difference between $120,000 and $110,000 is $10,000. The tax credit would apply to the taxes due on the $10,000. If the tax rate was $1.04 per $100 of assessed value, the tax credit would be $104 ($10,000 ? 100 x $1.04).
The Homestead Tax Credit application can be found online at www.onestop.md.gov.