A little about the Homestead Tax Credit:
From SDAT: “To help homeowners deal with large assessment increases on their principal residence, state law has established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage.”
If you feel your assessed value is too high, but decide not to appeal, particularly if you are protected by the Homestead Tax Credit, that is your choice. However, if you think you might sell within the next 3 years, it might still be worth appealing as your buyer will have to qualify on the full amount of the tax payment. Buyers don’t get the protection of the tax credit until they’ve been in the house for a year.
The Homestead Tax Credit does not affect your assessed value. It affects your payment. You may appeal your assessed value and still not see a marked reduction in payment because of the cap that is in place due to the tax credit. And even though you just got the assessment letter, you won’t know what the actual tax bill will be until July.
For example, if your home assessed at $400,000 and you think it is only worth $300,000, you might choose to appeal. However, if you already are protected by the Homestead Tax Credit, your actual payment might not change by much. BUT – if you sell, then the buyer has to qualify on the full tax payment for that $400,000. So even if it doesn’t change your payment, it is still worth challenging.
To find out if you are protected by the Homestead Tax Credit, go to http://sdat.dat.maryland.gov/RealProperty/Pages/default.aspx and scroll to the bottom. You do not qualify if the house is not your principle residence. If you want to see if the credit was applied on your current bill, go to http://taxinquiry.princegeorgescountymd.gov/
More in this series:
- Part 1 – General information gleaned from the 2 tax appeal clinics at the Cheverly American Legion.
- Part 2 – Advice from a neighbor who just got her worksheet and had a long conversation with the Assessment office.
- Part 3 – This page – About the Homestead Tax Credit and if you might sell in during this 3 year assessment cycle.
- Part 4 – Links to spreadsheets and data and helpful webpages.