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  • Writer's pictureCenter for Local Policy Analysis (CLPA)

Legislative Spotlight: Homestead Property Tax Credit (PGC Council)

Early this month, at the request of County Executive Angela Alsobrooks, CB-058-2021, "An Act Concerning Homestead Property Tax Credit" was introduced to the Prince George's County Council. The Homestead Property Tax Credit limits increasing taxable assessments each year to a fixed percentage. In Maryland, every county and municipality is required to limit taxable assessment increases to 10% or less every year.

Often, there are questions about the conditions one will be granted a tax credit. The Maryland Department of Assessments and Taxation notes that the County will grant a tax credit if the following conditions are met during the previous tax year:

  • The property was not transferred to new ownership.

  • There was no change in the zoning classification requested by the homeowner resulting in an increased property value.

  • A substantial change did not occur in the use of the property.

  • The previous assessment was not clearly erroneous.

  • A further condition is that the dwelling must be the owner's principal residence, and the owner must have lived in it for at least six months of the year, including July 1 of the year for which the credit is applicable unless the owner was temporarily unable to do so by reason of illness or need of special care. An owner can receive a credit only on one property---the principal residence.

  • Razed Dwelling and Vacated Dwelling for Making Substantial Improvements

  • Property owners who vacate their principal residence to raze the dwelling to replace it with a new home on the subject property or make substantial improvements to the property can continue to receive Homestead Tax Credit eligibility provided two conditions are met. First, the homeowner(s) must have owned and occupied the property as a principal residence for at least three full tax years immediately preceding the razing or the commencement of the substantial improvements. Second, the building of the replacement home or making the significant improvements must be completed within the next succeeding tax year after the tax year in which the razing or the substantial improvements were commenced.

CB-058-2021, if enacted, would establish the homestead property tax credit for Prince George's County for the taxable year that begins July 1, 2022. Based on the Consumer Price Index (CPI), the county proposes that the Homestead Property Tax Credit be set at 105% (or 5%). For reference, the Homestead Property Tax Credit percentage for Prince George's County in the taxable year that began on July 1, 2021, was 101% (or 1%).

This legislation will be discussed at the next Committee of the Whole meeting tomorrow at 10:00 am. The window to submit written testimony has expired. However, you can still view the discussion on the Prince George's County Council site or contact Council Chair Calvin Hawkins to voice your opinion.



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