Homeowners Must Take Action Now To Keep Homestead Tax Credit
(Note: On 3/27/08 the State announced that the online filing feature has been extended beyond April 1st)

For several years, Maryland has had a program in place to limit the impact of rising property tax bills. The program, known as the Homestead Tax Credit Program, effectively limits annual property tax increases to a certain percentage. Most homeowners currently receive this tax credit, which can amount to a savings of several hundred dollars per year.

Homeowners, who received assessment notices at the end of December 2007 must take action now in order to continue receiving the credit. The State of Maryland requires them to submit an application for the Homestead Tax Credit. Homeowners are only eligible to receive the credit on their primary residence. This eligibility verification effort is intended to weed out those incorrectly receiving the credit on rental and vacation properties.

Property taxes are calculated by multiplying the property assessment by the tax rate, then dividing by 100. When the assessment increases, so too does the amount of the taxes owed, even though the tax rate has not increased. For example, property assessments in Prince George’s County grew by more than 15% during the last assessment period. However, because Prince George’s County capped property tax increases at 3% this year, the amount of property tax you pay cannot be more than 3% above what you paid last year. The difference between what you would pay on the full assessment and what you are required to pay to the State, County and City shows on your bill as a Homestead Tax Credit.

The Homestead Tax Credit Application can be completed online at www.dat.state.md.us or by submitting the paper application included with the assessment notices sent out in December. The deadline for submitting the electronic application is April 1, 2008. Homeowners should be aware that they must provide their Social Security number as part of the application process.

Questions about the program or the application process should be directed to the Homestead Tax Credit Division’s toll free line at 1-866-650-8783. Information about the program is also available at www.dat.state.md.us.

The form may also be downloaded by clicking here.

Update: 3/27/08

The deadline for electronically filing an application to continue receiving the Homestead Tax Credit was April 1st. It has now been extended until further notice.

One third of the State is reassessed every year. Bowie is in the third of the State who were most recently reassessed and were notified in December 2007 of their new assessment. Only those residents who received reassessment notices at the end of December, were sent an access code that can be used to do the electronic filing.

Other residents of the State who have not received a reassessment notice, may file a paper application. They are not eligible to do electronic filing if they were not reassessed.