More than 100,000 Maryland homeowners have yet to apply for tax break

September 10, 2012|Jamie Smith Hopkins

The reminders are coming more frequently now, but plenty of homeowners don't seem to have gotten the message.

More than 100,000 Maryland homeowners haven't yet applied for a property-tax break known as the homestead credit, which this year is reducing the average Baltimore recipient's bill by more than $1,000. Some owners have received the break for years, but they'll lose it next tax year if they don't turn in an application by Dec. 31.

The General Assembly voted the requirement into law five years ago in an effort to root out homestead credits going to non-homesteads such as rentals. You qualify only on your principal residence, but homestead credit double-dipping has been a problem for years -- aggravated by the lack of a formal application process.

Those who have bought homes after 2007 aren't eligible for the credit until they apply. Those who bought earlier have had an extended stretch of time to get around to it -- but that's coming to an end.

Robert E. Young, director of the state Department of Assessments and Taxation, said his agency sent out letters this summer to 148,000 homeowners who hadn't yet applied and had received only one earlier notice by mail. (The assessors promised legislators that everyone would receive two notices, and this was the only group of people whose properties haven't been reassessed twice since the '07 law.)

Since then, assessors have received about 30,000 applications.

That still leaves more than 100,000 unaccounted for in that group. And there are others beyond that, since some of the folks who already had two reminders still haven't applied.

So: How many non-applicants are qualified homeowners who missed the notices and news stories, and how many are landlords just hoping to quietly ride out their last year of an unearned break? 

Young figures it's some of both. And there's a third category as well: Homeowners who qualify and know about the requirement but don't see the point.

That's because the homestead isn't a guaranteed break for everybody every year, but rather a cap on increases. (It varies by jurisdiction; the cap is 4 percent a year in Baltimore and Baltimore County.) If a Baltimore resident's assessed value balloons from $100,000 to $150,000, she'll see the amount she's actually taxed on rise 4 percent annually until she catches up ... 11 years later.

But after skyrocketing because of the housing bubble, assessed values have fallen overall for the last few years. That's made an increasing number of homeowners mathematically ineligible for the break.

Add in the fact that owners must include their Social Security number on the application to make it easier for state assessment staffers to verify the home is a principal residence, and Young said some have called up with variations of, "Why exactly should I be applying?"

His staffers' answer: So you can get it squared away now. "You don't want to be in a situation where you miss a year in the future," Young said.

If you're not sure whether you've applied or just want to confirm that nothing went awry with the processing, look up your address here. Choose your jurisdiction, click "street address" and type it in. Remember to leave off the suffix, i.e. "Avenue." Scroll down to the bottom and check out the status under "Homestead Application Information."

Haven't applied? You can try digging up your last reassessment notice, which should have included the application plus the unique access number you need to apply online here. (The state recommends doing so online because you get a confirmation back.) Or you can find the application here, print it off and either mail it in or call the state assessors for the unique number you need to apply online. The state's homestead unit is at 410-767-2165.

UPDATE: The state now has an email address for requesting the application and access number: (Without that last period, of course -- that's just ending the sentence.) The assessments agency said to include your property's street address and county.

Keep this in mind before you call the agency's homestead unit: Young says the eight-person crew is getting about 200 calls an hour. It's hard to get through. (People are calling in not just about the letters but also in response to heads-up notices included with some jurisdictions' July tax bills.)

Young urges homeowners with computers not to call with questions they can get answered online, like whether they've applied, so those without computers (or with questions their online access isn't helping with) can reach a live person.

He also suggests trying on Thursdays or Fridays, since calls are proving particularly heavy earlier in the week.

Oh, and there's a bit of good news for anyone who loses their homestead credit by failing to apply. Once you get the application in, you can pick up where you would have been in the following tax year -- starting July 2014 -- as if you'd never lost the credit. But you will be stuck paying the full tab for the tax year that begins next July.

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