General Assembly Approves a Baltimore City Homestead Tax Credit Transfer

| April 28, 2014 | 1 Comments

photoMaryland and Baltimore City officials are constantly looking for solutions to address Baltimore City’s high property tax rates. These rates currently sit at 2.248 per $100 of assessed value, more than double of any jurisdiction in Maryland with the exception of Charles County (1.20). The closest neighboring cities, Washington, DC and Philadelphia, sit at .85 (for residents) and 1.34, respectively. Though they are seeking more aggressive plans in the upcoming years, the Maryland General Assembly approved a small tax break for homeowners moving from one Baltimore City home to another.

Baltimore City homeowners who have been living at their current home for five years or longer are eligible for a $1,000 homestead property tax credit on the purchase of a new home in the city. A $2,000 homestead property tax credit is also available on a home purchased in a “low or moderate income census tract”┬áin which 51% of its residents are earning 80% of the city’s median income, which is $40,803 according to the U.S. Census.

The credit would last five years and would decrease at $100 per year. The credits would read as:

Year 1 – $1000
Year 2 – $900
Year 3 – $800
Year 4 – $700
Year 5 – $600

And, for the low or moderate income census tract:

Year 1 – $2000
Year 2 – $1900
Year 3 – $1800
Year 4 – $1700
Year 5 – $1600

The bill was sponsored in the Maryland Senate by District 46 Senator Bill Ferguson and in the House of Delegates by District 43 Delegate Maggie McIntosh. It received unanimous support from the Senate and House, and will be enacted on October 1, 2014. “We have a lot of young families who now want to stay in the city, but the property tax rates make it unattractive. This is a means to reward people for choosing to stay in the city,” Senator Ferguson told

Ferguson and McIntosh were proposing a $2,500 tax credit and a $5,000 tax credit for low or moderate income census tracts, but Baltimore City Finance Department put a cap on the credits at $1000 and $2000, though the Baltimore City Council must still approve the $2,000 credit for the lower or moderate income census tracts.

The Maryland General Assembly also passed two other measures to assist in lowering the tax burden on Baltimore City homeowners. Since nearly one-third of Baltimore City properties are owned by non-profits, which currently do not pay any property tax, they passed a certification of use bill that will make sure non-profit-owned properties are actually being used for non-profit businesses and initiatives. They also passed a bill which would provide more assessments on multi-unit dwellings which they feel have often been assessed at a value lower than the actual value of the properties.

Baltimore City Mayor Stephanie Rawlings-Blake has also enacted a plan to lower the property tax rate $.20 by 2020 in 2013, lowing the rate from 2.268 to 2.o68. The plan has been funded by city revenues from the soon-to-open Horseshoe Casino, as well as new trash collection fees.

With these small efforts in place, Senator Ferguson knows much more needs to be done. “Over the next decade, we absolutely need to address the competitiveness of our rate compared to our neighbors, hopefully getting it down to the 1.2 range. To do it in one swoop would be too much, but there are a whole lot of ideas, and hopefully some more aggressive plans will be put into place soon,” said Ferguson.

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