Rising home values have diminished a state property tax credit for some low-income homeowners, and state lawmakers are considering a plan to change that.
Del. John R. Leopold, a Pasadena Republican, has proposed changing the way the state computes property tax credits for homeowners who meet certain income requirements.
The current state program offers to income-eligible households a tax break on up to $150,000 of their home's value. But that credit has been wiped out in many cases by the recent rise in home values, Leopold says.
The state limits all owner-occupied residential assessment increases to 10 percent a year, and some jurisdictions offer further limits.
Any benefit taxpayers receive from the assessment limit is counted against them when the state computes the property tax credit for eligible homeowners. As home values increase, the tax credit diminishes.
Under Leopold's proposal, the tax credit would be preserved through a new state formula that would allow owners of more expensive homes to continue to qualify.
About 50,400 state taxpayers use the Homeowners Property Tax Credit program, many of them senior citizens, Leopold said. The average tax credit is $755. If Leopold's proposal had been in effect last year, 3,437 people would have received an additional $142 each in tax credits, state officials said.
The state provides $40.4 million in such tax credits annually. Leopold's proposed changes would cost the state an additional $489,581 a year, said Robert Young of the state Department of Assessments and Taxation.