1. What is this new law that requires homeowners to apply for the Homestead Tax Credit? Why is it needed?
Legislation enacted by the 2007 session of the General Assembly requires homeowners to submit a one-time application in order to continue their eligibility for the homestead tax credit. The homestead credit limits the amount of assessment increase on which a homeowner will pay property taxes in that tax year on the one property actually used as the owner´s principal residence. The reason why the application process was needed is because some property owners were improperly receiving the credit on vacation homes and rented properties. County and municipal governments were losing tax revenues needed to provide important services to their residents. The only way to verify residency of the homeowner is to require an application and have the filer provide his or her Social Security number.
2. Why should I want to submit the homestead application?
Because of assessment increases and because of the low assessment caps adopted by the county governments, most homeowners in the State have been receiving substantial homestead credits each year on their property tax bills. Anne Arundel County has been limiting taxable assessment increases to 2%. The homestead caps in Baltimore City and Baltimore County have been limiting the taxable assessment increases to 4%. Prince George´s County government has been limiting assessment increases to 5%. If a homeowner is later made ineligible for the credit for failure to submit an application, he or she may receive a substantial increase in the property tax bill without the credit.
3. What government agency is sending out these applications?
The Department of Assessments and Taxation will include the application in the Assessment Notices mailed to one-third of the property owners during the regular reassessment cycle beginning December 2007. New purchasers of properties also will be mailed a homestead application by the Department.
4. What is the Department of Assessments and Taxation doing to assist homeowners with filing their applications?
First, the homestead application form included in the Assessment Notice advises the homeowner that he or she can file the application electronically by going to the Department´s website at www.dat.state.md.us. Each property owner´s application form has a unique 8-digit security "Access Number" for submitting the application on the internet. Second, the Department also provides in the Assessment Notice a postage paid return envelope for homeowners who want to submit the paper homestead application form. Third, you may contact the Homestead Tax Credit Division at (410) 767-2165 or toll free outside the Baltimore Metro area at (866) 650-8783 for individual questions.
5. What is the Department of Assessments and Taxation doing to insure the confidentiality of my Social Security number that I am required to provide on the homestead tax credit application form?
The Department has a 30-year history of receiving and absolutely protecting confidential Social Security numbers and income tax return information received from hundreds of thousands of homeowners applying for the Homeowners´ Tax Credit Program based on income. These same protections and additional protections will be provided to protect the confidentiality of Social Security numbers supplied on homestead tax credit applications. For those homeowners who submit applications electronically, the Department´s website is an "encrypted" protected site that uses the unique 8-digit security "Access Number" and scrambles the individual Social Security numbers. For those homeowners who submit a paper application, there is a series of administrative procedures and protections under federal law that the Department follows in accordance with the strict non-disclosure and safeguard activities required of the agency because of our receipt of federal income tax information.
If you receive a reassessment notice you may file the Homestead Tax Credit Eligibility application three ways:
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