Tax Alert - Immediate Action Required
Annual Property Taxes and Homestead Credits
As of January 1st, 2008 the state and county will no longer automatically apply homestead tax credits to your tax bill.
Property owners who use the property as their principal residence will receive an assessment notice containing a Homestead Tax Credit Application for the first time this year beginning January 1, 2008. This one-time application must be submitted in order to insure that the credit is granted only on eligible properties and not on properties that are rented or used as vacation homes.
The applications can be filed on-line on the Maryland State Department of Assessments and Taxation's at "www.dat.state.md.us" website or by mailing the paper form in the postage paid envelope included in the assessment notice.
Sample Tax Bill with Homestead Credits....
AS you can see on the above sample bill, the normal annual taxes would be $6,277.76 per year, but after applying the credits, the homeowner saves $2,108 dollars each year. Total Bill $4,169.
Credits will differ on each property, depending how long you have lived in the home and how much it has appreciated. Credits could be substantially higher than the sample home shown above.
Until now, Maryland residents have enjoyed an this automatic reduction in the property taxes. Annual tax increases were capped at 10% per year, so that homeowners could afford to stay in their homes.
With the new tax increases, the credit shall no longer apply to second homes or rental properties. The new revenue should be HUGE. Renters should be prepared for rent increases as landlords are hit with huge tax increases.
This new tax law has the potential to be a terrible burden on senior citizens. Elderly residents may not understand the new tax notices and can easily miss mailing the application. They would be facing huge tax increases which could be beyond their ability to pay. Elderly homeowners, on a fixed income, who may be suffering from illness, depression, memory difficulties or impaired cognitive abilities are at the greatest risk of loosing their homes to tax foreclosures. The process is fast and horrific.
If you have elderly neighbors, friends or family members, who may be at risk, please check on them to make sure they understand the new law and have mailed in their applications. They only have to do it one time.
Applications are available online as mentioned above.
Go to:
http://www.dat.state.md.us
If you have additional questions about the application see:
http://www.dat.state.md.us/sdatweb/Homestead_app.htm