Homestead Tax Credit Filing Deadline May Be Missed By Many

Maryland home owners have until December 31, 2012, to file their Homestead Tax Credit application with the State of Maryland Department of Assessment and Taxation (SDAT).

According to SDAT, the Homestead Tax Credit "limits the increase in taxable assessments each year to a fixed percentage".

In Baltimore City, that means property taxes may only increase 4% per year, instead of much higher without the Homestead Tax Credit.

The Homestead Tax Credit is for primary residents.  Because many people were improperly claiming the credit on secondary homes, such as rentals, the state is making everyone apply, one time only, for the credit.  The state has sent out several notification over the past few years to residents.

But I am beginning to get a sense that there are a lot of people who have not applied.

Recently I received a notice regarding the Homestead Tax Credit deadline from my City Councilman, Ed Reisinger.  He explained that you can check to see if you have applied for the credit by visiting the SDAT website and looking up your address.  At the bottom of the page, it will read either that your application has been approved, received, or that no application has been received.  Mine was approved in 2010. 

I decided to see if my neighbor applied.  He is an elderly man and he has become forgetful over the years.  I looked him up on the website and low and behold I discovered he had not applied.  I decided to look up another neighbor and found that he too had not applied. 

I printed out the applications for both of them and delivered them to my neighbors, and hopefully they will get them filled out and mailed in by the deadline.

But this made me curious about how many other people haven't applied.  I decided to check out all the houses on my street.  I found that out of the 88 homes I checked, 41 had either had their application approved or they have been received by SDAT.  47 homes had not applied.

Now, I admit, I am no expert on reading SDAT website information.  Basically I looked to see if the homes were listed as primary residences and, if so, I noted whether or not they applied for the tax credit.

The Baltimore Sun reported in April, 2012, that some people did not apply because they knew they were ineligible for the tax credit.  The Sun stated that "807,000 homes in the state are getting the break" and that "about 150,000 owners haven't sent in their applications".

That equals to about 18.6% of home owners had not filed for the tax credit, according to my calculations.  But, according to my sampling, 53.4% of the people on my street may not have filed.  Something wasn't right.

I decided to take a very wide and extremely random and very unscientific sample of homes throughout Baltimore City to see how many have applied for the tax credit.

What I found is that out of 438 homes sampled and listed as primary residence, 50.7% have applied for the tax credit.  Another 48.6% have not applied for the tax credit and 0.7 had their applications denied.

Again, there could be many good reasons why such a high percentage of home owners have not applied for the tax credit.  But, maybe they are like my two neighbors and they either forgot or didn't know about the tax credit deadline. 

 I suppose we will find out if my statistics are even remotely accurate by how big of a howl we hear coming out of Baltimore City when the tax bills come out after the Homestead Tax Credit application period has expired.

It may be an inaudible whisper.  But if my numbers are even remotely accurate, the wail could be deafening.

(According to the Sun, if home owners miss the deadline, they may reapply for the Homestead Tax Credit in 2014.)

Further Information
For questions about the Homestead Tax Credit, you may telephone 410-767-2165 in the Baltimore metropolitan area or at 1-866-650-8783 toll free elsewhere in Maryland or email the Homestead unit at homestead@dat.state.md.us.  

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Here is my sample of primary residences in Baltimore City.  The sampling is very random and it was not conducted using any scientific methods. 

I tried to take streets from all sections of the city.  If the street was short, I'd try and use all the homes on it, up to 25.  If the street was long, I'd try and take a sample of homes from each page listed on the SDAT website.  I tried not to sample homes that are next to each other, whenever possible.  I figured the wider apart the homes were, the less likely one neighbor influenced another, the way I hopefully did with my two neighbors.  I also excluded condominiums or listings that I did not understand fully.

Here are my results:

Note:  A "yes" denotes the Homestead Tax Credit has either been approved or received by SDAT.  A "no" denotes no application has been received by SDAT, as of 12/4/12.  A "denied" denotes an application was received by SDAT but it was denied.

Poplar Grove St. (21216): 
25 sampled
7  yes
17 no
1  denied

Cox St. (21211)
12 sampled
6 yes
6 no

Elm Ave. (21211)
22 sampled
16 yes
6  no

Colorado Ave. (21210)
25 sampled
19 yes
6  no

Gist Ave. (21215)
25 sampled
8  yes
17 no

McElderry St. (21205)
25 sampled
10 yes
15 no

Bank St. (21202)
25 sampled
14 yes
9  no
2  denied

Elliott St. (21224)
25 sampled
15 yes
10 no

Pinewood Ave. (21214)
24 sampled
15 yes
9  no

Southland Ave. (21225)
3 sampled
0 yes
3 no

Terra Firma Rd. (21225)
25 sampled
13 yes
12 no

Drury Ln. (21229)
25 sampled
16 yes
9  no

Lyndhurst St. (21229)
25 sampled
9  yes
16 no

Washburn St. (21225)
16 sampled
9 yes
7 no

Lanvale St. (1700 blk - 2500 blk)(21217)
25 sampled
9  yes
16 no

Wirt Ave. (21215)
10 sampled
8 yes
2 no

E. Heath St. (21230)
13 sampled
7 yes
6 no

Mactavish Ave. (21229)
88 sampled
41 yes
47 no

Total:

438 sampled
222 yes (50.7%)
213 no  (48.6%)
3 denied (0.7%)