IF YOU THINK big-time developers are the only ones getting property tax breaks in Baltimore, think again.
Some wealthy homeowners are doing quite nicely as well.
Their advantages come in large part courtesy of the clumsily named newly constructed dwelling tax credit.
As the city's annual property tax bills come due -- the initial deadline for discounted payment was Friday, and the final date for paying at least half the bill without penalty is Sept. 30 -- this nearly decade-old program all but cries out for review.
Established in the mid-1990s to stimulate building and to encourage middle-class homeownership during a time of wholesale flight from the city, the credit offers a five-year property tax break on new residences or gut rehabs of vacant city-owned buildings.
The break begins at 50 percent of the property tax in the first year, and decreases by 10 percent a year after that until the owner pays in the sixth year the same taxes as the rest of us.
Among the current beneficiaries of the break, and the amount of their credit, according to the city's Department of Finance: the owner of a new $900,000 Canton rowhouse, $10,476; the owner of a new $780,000 Federal Hill rowhouse, $9,042; and the owner of a new $620,000 Fells Point rowhouse, $7,137. And that's just in the first year of the tax break.
The names and addresses of the recipients of this government largess are omitted to protect the innocent, which they are. They didn't create the break; they're just taking advantage of it.
Overall, as of late last month, 673 city homeowners were receiving tax credits worth $1,216,405 for new homes -- an average of $1,807 each, according to Finance Department figures. More than 140 owners of these newly built homes received credits worth more than $2,328 -- an amount equal to the total annual tax bill on a house worth $100,000.
In the first couple of years of the program, the average credit was less than $700.
The trend is not lost on finance officials. In a report on the program contained in this year's budget, the department noted that the average income of those taking advantage of the program was $80,000, up $10,000 from the previous year.
"This average income trend reflects, in part, the substantial income of certain program participants who are utilizing the program in their purchase of high-cost homes frequently in waterfront developments and communities," the report said.
