Q:

How do you apply for a homestead tax credit in Maryland?

A:

Quick Answer

As of 2015, the electronic application for the Maryland Homestead Property Tax Credit is available online at Sdathtc.resiusa.org, according to Maryland.gov. Alternatively, download the PDF version from the Maryland.gov website, and then fax or mail it to the Department of Assessments and Taxation.

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Full Answer

The application process is a one-time requirement enacted to prevent homeowners from claiming the credit for rental or vacation properties, which can cause an imbalance in tax revenues, Maryland.gov states. The state government’s Real Property database maintains an updated list of eligibility for homeowners who want to check their status annually. The taxation department typically mails the application to new homeowners after recording the deed.

The Homestead Credit helps offset the cost of property tax assessments on a homeowner’s principal residence by establishing a fixed percentage, which limits how much the local government can increase a taxable assessment, as Maryland.gov explains. Based on the annual limit as of 2015, if the home increases in market value, the homeowner can’t be taxed for the portion exceeding 10 percent.

Homeowners continue to receive the Homestead Credit if the property isn’t sold to a new owner during the previous tax year and the property still functions as a principal residence, according to Maryland.gov. To be eligible, the owner must reside in the property for at least six months each year, but an exception exists if the owner has to relocate temporarily for a health care-related issue. Additionally, rezoning that causes a substantial change in market value may also affect eligibility.

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