Auditors Recommend Regular Checks of Homestead Tax Credit Eligibility

In a recently released audit report, legislative auditors found that the State Department of Assessments and Taxation (SDAT) should take additional steps to ensure that only those eligible are receiving the homestead property tax credit. From the Baltimore Sun article (limited free views available):

Based on a limited review, auditors estimated that more than 4 percent of the Maryland property owners now deemed eligible do not actually qualify for the credit. The tax break is limited to owner-occupied homes.

This issue was raised after the Baltimore Sun did investigation of homeowners receiving the credit in Baltimore City. The Executive Director of SDAT stated that he agreed with many of the audit recommendations.

But Robert E. Young said the department would need more money to hire employees to carry out some changes. In addition to asking for a budget increase, he said he would like to see local governments pay for continuing eligibility reviews.

“The auditors and the department don’t disagree about how to handle it going forward,” the director said. “It’s just a question of what is the commitment of resources we’re going to be able to maintain?”

One of the recommendations in the report has been introduced in legislation this session.  SB 645 would require counties to provide electronic records related to abandoned property and residential rental licenses or permits to assist with establishing principal residency for a homestead property tax credit.  MACo supported this legislation with an amendment to state that counties would provide this information “to the extent feasible.”  Not all counties have abandoned property registries and/or listings of residential rental licenses or permits, which would make it extremely difficult for all counties to comply with this legislation.

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