To help reduce the tax burden for full-time Garrett County residents, the Board of Garrett County Commissioners proposes lowering the Homestead Property Tax Credit cap from 5 percent to 3 percent per annum.
The Homestead Property Tax Credit acts to cap assessments of owner-occupied residences so that a resident’s property tax burden does not increase substantially over the prior year. It provides consistency for taxpayers who live in and own their homes.
Every county and municipality in Maryland is required to limit taxable assessment increases to 10 percent or less each year. However, nearly every county has exercised its authority to lower its cap, providing security to homeowners beyond what the State requires. Click here for a chart depicting each county and municipal Homestead Credit percentage.
Technically, the Homestead Credit does not limit the property’s market value as determined by the State Department of Assessments and Taxation (SDAT). Instead, it is a credit calculated on any assessment increase exceeding 10 percent (or the lower cap enacted by the local governments) from one year to the next.
SDAT is responsible for assessing property in Maryland and splits more than 2 million property accounts into three groups, each appraised once every three years. The triennial process and its three-year phase-in schedule deliberately offer some cushion for taxpayers during periods of swift and considerable increases in property values.
As previously reported on Conduit Street, SDAT announced its 2023 reassessment of 779,573 “Group 2” residential and commercial properties yielded an average increase in value of 22.2 percent for all residential properties and 15.8 percent for all commercial properties over the three years since the last “Group 2” reassessment in 2020 before the pandemic. The overall statewide increase for “Group 2” properties is 20.6 percent.
It is important to note that county property tax revenues will not increase by 20.6 percent, as this reassessment only covers one-third of property accounts. Furthermore, when property values increase, the increase is phased in equal increments over the next three years.