Maryland Homestead Tax Credit: Arbutus Buyer Guide

If you own the home you live in around Arbutus, the Maryland Homestead Tax Credit can limit how fast your property taxes rise when your assessment goes up. In Baltimore County, the increase in your taxable assessment is capped at 4 percent a year for county taxes, but only if your one-time Homestead application is on file with the state.

What is the Homestead Tax Credit?

The Homestead Tax Credit is a Maryland program that helps homeowners when assessments jump. According to the Maryland Department of Assessments and Taxation Homestead page, it limits the increase in taxable assessments each year to a fixed percentage. The state cap is 10 percent, and each county can set a lower cap.

Baltimore County lists its 4 percent cap on its Baltimore County Homestead Property Tax Credit page.

How does the cap work in real life?

Here is a simple made-up example. Say your taxable assessment was 300,000 dollars last year, and your new phased-in assessment is 330,000 dollars. The Baltimore County cap would hold the county's taxable assessment increase to 4 percent, or 312,000 dollars, so you would not pay county property tax on the 18,000 dollars above the cap that year. The state cap of 10 percent would not kick in, because the increase is exactly 10 percent.

The credit only shows up in years when your assessment rises faster than the cap, so you may not see it on every bill. That does not change your approval.

Do I need to apply for the Homestead Tax Credit?

Yes. Maryland requires a one-time application, and you only file it once while you own that home. To check whether you already have one on file, look up your property on SDAT's Real Property search. The Homestead status is at the bottom of your property's page.

• "Approved" or "Application Received" means you are all set.
• "No Application" means you should apply.

You can apply online through Maryland One Stop by choosing the Department of Assessments and Taxation and then the Homestead Tax Credit Eligibility Application. A paper application is also available on the SDAT site.

Who qualifies?

The home must be your principal residence, and you must have lived there at least six months of the year, including July 1 of the year the credit applies. You can only get the credit on one property. The credit is also based on conditions during the previous tax year, including that the home was not transferred to new ownership, so a brand-new owner may not see it right away. Filing early makes sure you are on file.

What does this mean for first-time buyers in Arbutus?

Maryland law now requires that a residential sales contract include a statement about the Homestead Property Tax Credit, and the settlement agent must hand the buyer a copy of the application at closing. So if you just bought your first home here, look through your closing papers. When I work with first-time buyers, I always remind them to file it. If you are just starting out, my post on Maryland home loan help for teachers and first responders is worth a read too.

Already own a home and thinking about your next move? My selling your home page walks through how I help.

Frequently Asked Questions