Assembly passes bill that expands tax credit program

April 06, 2006|by TAMELA BAKER

ANNAPOLIS - Now is the time to apply for tax relief under the state's homeowners' property tax credit program, and new legislation expanding eligibility limits means more homeowners can take advantage it.

Rising property taxes have proved to be a lightning rod issue this year in the Maryland General Assembly as well as in local jurisdictions across the state. Nearly 100 tax relief bills were filed this year, and legislators heard hours of testimony from Marylanders, particularly those who were elderly or on fixed incomes, who feared having to give up their homes because they said they could no longer afford the taxes.

Many of those bills are pending, but both houses of the legislature have approved the measure expanding the tax credit program.

Called the "circuit breaker" when initiated for elderly homeowners in 1975, the property tax credit shut off the property tax bill at a certain point just as an electric circuit breaker shuts off the current when the circuits overload.


Since then, other homeowners meeting certain income and assessment criteria have become eligible.

This year's legislation only awaits the governor's signature to become law. It raises the maximum home assessment that can be applied from $150,000 to $300,000, and raises the allowable percentage of income dedicated to property taxes. It also raises eligible income limits, which vary by community.

Three basic criteria must be met to qualify, according to the Maryland Department of Assessments and Taxation:

· The applicant must own or have a legal interest in the property.

· The dwelling on which the applicant seeks credit must be the principal residence for at least six months of the year, including July 1, unless the applicant is a recent home purchaser or is unable to do so because of health or need of special care.

· The applicant's net worth, not including the value of the property on which you are seeking the credit, must be less than $200,000.

Homeowners who file and qualify by May 1 will receive the credit directly on their tax bill or as a credit certificate issued at the same time the property tax bill is mailed, according to the department's Web site. Those who file by the Sept. 1 deadline will receive any credit due either in the form of a revised tax bill or a tax credit certificate to be used in payment of the bill.

Last year, 1,636 Washington County residents received credits, Treasurer Todd Hershey said in January.

Del. John P. Donoghue, D-Washington, was an early supporter of the bill to expand the program; Del. Robert A. McKee, R-Washington, Del. Christopher B. Shank, R-Washington and Del. LeRoy E. Myers, R-Washington/Allegany also signed on as co-sponsors. A similar bill from Gov. Robert Ehrlich had the Republicans' early support, but was stranded in the House Ways and Means Committee while the other bill, backed by the Democratic leadership, was advanced.

While the program applies to the state's portion of property taxes, Shank noted that local governments can piggyback off the program, adding "supplemental" credits for those who qualify. Washington County has not exercised that option, he said.

For more information on the program, contact the department's Baltimore office at 800-944-7403, or the department's Web site at

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