Cecil County Councilwoman Diana Broomwell recently introduced legislation to reduce the assessment cap under the county’s Homestead Tax Credit program from 8% to 4%. As reported by the Cecil Whig,
The policy, known as the Maryland Homestead Tax Credit, was designed to help homeowners deal with large assessment increases on their principal residence during times of escalating home prices.
The state has set this limit at 10 percent for its portion of the tax bill. However, counties and towns are allowed to reduce their portion below 10 percent of the tax bill.
In simple terms, a credit is applied to assessments that go up at a rate of greater than 10 percent to bring it down to 8 percent for tax purposes, not actual market value.
For example, if an old assessment was $100,000 and a new phased-in assessment for the first year is $120,000, then limiting the increased assessment to only 10 percent would translate to $110,000.
That difference of $10,000 is the amount to which the tax credit would apply.
The Council will discuss the fiscal effects of this legislation during a public hearing scheduled for August 19, 2014 at 7:00 pm. If the legislation passes, it would take effect July 1, 2015.