A working group of county finance staff and the State Department of Assessments and Taxation met at the MACo on May 29 to discuss Homestead Tax Credit Applications and recent foreclosure legislation. The group, which is coordinated by MACo Legislative Director Andrea Mansfield, has been meeting quarterly since September 2011 to discuss county property assessment data needs and billing files, property assessments, homestead property tax credits, other property related tax credit programs, and other issues that affect a county’s ability to properly bill and collect property tax revenue.
At this meeting, Director Robert Young provided an update on the number of Homestead Property Tax Credit applications received by SDAT. Legislation enacted in 2007 required an application to be filed by December 31, 2012 to continue receiving a credit. However, legislation that passed during the 2013 legislative session has extended deadline to December 30, 2013 to give home owners more time to file. MACo supported the legislation to extend the deadline as long as it didn’t result in administrative complexities for the counties.
Mr. Young reported that there are approximately 138,000 homeowners who have still not filed an application. The largest number of homeowners live in Anne Arundel, Baltimore, and Prince George’s Counties and Baltimore City. SDAT plans to do one more special mailing to these homeowners and is willing to assist counties who may want to do a special mailing of their own.
Mr. Young also discussed legislation enacted during the 2012 session to address the problem of foreclosed properties improperly retaining the Homestead Property Tax Credit. The legislation now in effect, requires a bank or other secured party who purchases a property through the foreclosure process to notify the local supervisor of assessments of the State Department of Assessments and Taxation (SDAT) within 60 days after the court ratifies the sale to provide for the removal of the Homestead Tax Credit that may have been associated with the property. MACo supported SB 123 as it would result in a more efficient process for the removal of these Credits and increased revenue for the State and local jurisdictions.
SDAT has recently sent a letter to every Finance and Treasurer’s Office providing guidance on the implementation of this new law. SDAT is requesting, “that starting immediately, when the transferor in a transaction is a lender which has previously foreclosed on the property, the new transaction should not be recorded in Land Records until the local assessment office has determined that the Homestead Credit eligibility for the property has been removed.” The full guidance memo can be found here.
The working group plans to meet again in the fall.