The Homestead Property Tax Credit is a statutory limit on the amount an assessment increase may affect a taxpayer’s tax burden. This is important for owner-occupied dwellings as a provision of a property tax credit against large assessment increases that functions much the same as a cap.
In an effort to help reduce the tax burden for full-time Garrett County residents, The Board of Garrett County Commissioners proposes to lower this rate. This could cap the increased taxable assessment at 3% per year.
Any residents with Garrett County declared as a primary residence can submit the Homestead application. Due to the state’s process, the limitation reduction would be applied in Fiscal Year 2025.
Homestead Property Tax Credit History
Since 1977, State law provided that owner-occupied dwellings were not taxed on annual assessment increases that exceed 15%.
During the 1990 and 1991 Sessions of the General Assembly, significant changes were made to the Homestead Property Tax Credit Program. For the first time, the credit was applied to the State property tax to limit taxable assessment increases for homeowners to 10% annually. Additionally, each county was mandated to adopt a local ordinance or resolution specifying a local percentage of 0% to 10% for purposes of local property taxation.
Homestead Property Tax Credit Implementation
The Homestead Credit percentage selected by each county is expressed as a percentage increase from the prior year’s assessment. If a municipality disagrees with the Homestead Credit Percentage specified by its county, municipal officials may set their own limit between 0% and 10%. If a municipality takes no action, then the county percentage will apply to assessments used to compute municipal taxes.
Local percentages (county and municipal) remain in effect until changed by local action. County governments may, in the future, change their Homestead Credit percentage, but must do so by November 15th preceding the year of the proposed change. Municipalities may change the percentage before November 25th of the preceding year.