To help retain and grow families living in Baltimore City, Baltimore officials plan to offer tax credits of up to $5,000 for homeowners who currently live and purchase new homes within the City. The program, called the Resident Retention Tax Credit, was pushed by Delegate Maggie McIntosh during the 2014 General Assembly session. The Senate version of the bill was sponsored by Senator Bill Ferguson.
As reported by the Baltimore Sun:
The Resident Retention Tax Credits – which will be introduced before the City Council Monday – are intended to help residents who lose their Homestead tax credits when they switch homes.
“This has the potential to be a very effective tool in retaining families and contributing to my goal of growing Baltimore by 10,000 families over the next decade,” Mayor Stephanie Rawlings-Blake said in a statement.
The program, as originally envisioned, would have allowed a homeowner to transfer a homestead property tax credit to the new home. For ease of administration, the City has instead proposed to offer a tax credit.
Baltimore residents receiving a Homestead tax credit can be eligible for five years of the Resident Retention Tax Credits when they move.
City officials have allocated $3 million – which will cover about 750 credits – for the program. They will be awarded on a first-come, first-served basis, [William] Voorhees said, [Director, Revenue and Taxation].
Residents will receive a $1,000 tax credit in the program’s first year, followed by credits of $900, $800, $700 and $600. Homeowners who buy in poorer areas could be eligible to earn an additional $200 in credits per year, he said.
In the sixth year of the program, the homeowner will return to receiving his or her Homestead property tax credit, Voorhees said. The average Homestead property tax credit per year in Baltimore is currently $860.
If the Council passes the legislation, the program will begin in 2015.
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