HOMEOWNERS’ PROPERTY TAX CREDIT DEADLINE – October 31, 2007

What is the Homeowners' Property Tax Credit Program?

The State of Maryland has developed a program which allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income.

This plan has been in existence since 1975 when it was known as the "circuit breaker" plan for elderly homeowners. The plan was called circuit breaker because it shut off the property tax bill at a certain point just like an electric circuit breaker shuts off the current when the circuit becomes overloaded. The Maryland General Assembly has improved the plan through the years so that now this program is available to all homeowners regardless of their age, and the credits are given where needed based upon the person's income.

What Are The Other Requirements?

Before your eligibility according to income can be considered, you must meet three basic requirements.

  • You must own or have a legal interest in the property.
  • The dwelling on which you are seeking the tax credit must be your principal residence where you live at least six months of the year, including July 1, unless you are a recent home purchaser or unless you are unable to do so because of your health or need of special care.
  • Your net worth, not including the value of the property on which you are seeking the credit, must be less than $200,000.
  • Your combined income can not exceed $60,000.

How Does One Receive The Credit?

Homeowners who file and qualify by May 1 will receive the credit directly on their tax bill or as a credit certificate issued at the same time the property tax bill is mailed. Persons who file later up until the September 1 deadline will receive any credit due either in the form of a revised tax bill or a tax credit certificate to be used in payment of the bill. Applicants filing after May 1 are advised not to delay payment of the property tax bill until receipt of the credit if they wish to receive the discount for early payment offered in some subdivisions. A refund check will be issued by the local government if the tax bill was paid before the tax credit was granted.

When and How Do You Apply?

The Homeowners' Tax Credit is not automatically granted and each person must apply and disclose his or her income. You must apply every year by no later than October 31, 2007 on a standard application supplied by the Department of Assessments and Taxation. Applications are available as of February each year at the local assessment offices and at most public libraries, or by calling the Tax Credits Telephone Service at 410-767-4433 (Baltimore Area) or 1-800-944-7403 (Toll Free).

 

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