MACo Associate Director Kevin Kinnally testified before the House Ways and Means Committee on February 6, 2020 to oppose HB 411 – Homestead Property Tax Credit – Calculation of Credit for Dwelling Purchased by First-Time Homebuyer.
This bill opens up property tax savings under the Homestead Property Tax Credit to be “transferrable” to new homebuyers, if it is their first home in Maryland. This dramatically undermines the longstanding purpose of the credit – to ensure stability in tax bills after the time of purchase.
From the MACo Testimony:
Counties oppose this bill because it compromises the basic nature of the Homestead Property Tax Credit, and threatens a severe fiscal impact to county budgets. The Homestead Property Tax Credit acts to essentially cap assessments of owner-occupied residences, so that a resident’s property tax burden does not increase too substantially over the prior year. It provides consistency for taxpayers who live in and own their homes. Nearly every county has exercised their authority to lower their caps, providing security to homeowners beyond that which is required by the State.
However, if the tax credit were expanded to all homes transferred to new homeowners, counties could lose up to $12.5 million from their most reliable revenue source by fiscal 2025, according to the bill’s fiscal note. Counties could be forced to eliminate their expansions of the Homestead Property Tax Credit altogether where feasible – or, potentially, cut budgets for education, public safety, roadway maintenance, and other essential public services.
Follow MACo’s advocacy efforts during the 2020 legislative session on MACo’s Legislative Tracking Database.