Maryland 2024 Regular Session

Maryland House Bill HB1324 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1324
6	6
7	7	HOUSE BILL 1324
8	8	Q1 4lr2662
9	9
10	10	By: Delegates Wivell, Baker, and Valentine
11	11	Introduced and read first time: February 9, 2024
12	12	Assigned to: Ways and Means
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Homestead Property Tax Credit – Eligible Properties – Alteration 2
19	19
20	20	FOR the purpose of expanding eligibility for the homestead property tax credit to include 3
21	21	additional residences; and generally relating to the homestead property tax credit. 4
22	22
23	23	BY repealing and reenacting, with amendments, 5
24	24	Article – Tax – Property 6
25	25	Section 9–105(a), (c)(1) and (4), (d), (f), (g), and (i) 7
26	26	Annotated Code of Maryland 8
27	27	(2019 Replacement Volume and 2023 Supplement) 9
28	28
29	29	BY repealing and reenacting, without amendments, 10
30	30	Article – Tax – Property 11
31	31	Section 9–105(c)(2) and (3) and (k) 12
32	32	Annotated Code of Maryland 13
33	33	(2019 Replacement Volume and 2023 Supplement) 14
34	34
35	35	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
36	36	That the Laws of Maryland read as follows: 16
37	37
38	38	Article – Tax – Property 17
39	39
40	40	9–105. 18
41	41
42	42	(a) (1) In this section the following words have the meanings indicated. 19
43	43
44	44	(2) (I) “ADDITIONAL RESIDENCE ” MEANS A HOUSE AND TH E LOT 20
45	45	OR CURTILAGE ON WHIC H THE HOUSE IS ERECT ED. 21
46	46
47	47	(II) “ADDITIONAL RESIDENCE ” INCLUDES: 22 2 HOUSE BILL 1324
48	48
49	49
50	50
51	51	1. A CONDOMINIUM UNIT OF AN INDIVIDUAL WHO HA S A 1
52	52	LEGAL INTEREST IN TH E CONDOMINIUM ; 2
53	53
54	54	2. AN APARTMENT IN A CO OPERATIVE APARTMENT 3
55	55	CORPORATION OF AN INDIVIDUAL WHO HA S A LEGAL INTEREST I N THE APARTMENT ; 4
56	56	AND 5
57	57
58	58	3. A PART OF REAL PROPE RTY USED OTHER THAN 6
59	59	PRIMARILY FOR RESIDE NTIAL PURPOSES , IF THE REAL PROPERTY IS USED AS A 7
60	60	RESIDENCE BY AN INDIVIDUAL WHO HAS A LEGAL INTEREST IN THE REAL 8
61	61	PROPERTY. 9
62	62
63	63	[(2)] (3) “Active member” means: 10
64	64
65	65	(i) a shareholder in a family corporation; 11
66	66
67	67	(ii) a partner in a general partnership; or 12
68	68
69	69	(iii) a member of a limited liability company or partner in a limited 13
70	70	liability partnership who has or shares the authority to manage, control, and operate the 14
71	71	limited liability company or limited liability partnership and who shares the assets and 15
72	72	earnings of the limited liability company or limited liability partnership under an operating 16
73	73	agreement under § 4A–402 of the Corporations and Associations Article or under a 17
74	74	partnership agreement. 18
75	75
76	76	[(3)] (4) “Agricultural ownership entity” means a family corporation, 19
77	77	general partnership, limited liability company, or limited liability partnership that: 20
78	78
79	79	(i) owns real property that: 21
80	80
81	81	1. includes land receiving an agricultural use assessment 22
82	82	under § 8–209 of this article; and 23
83	83
84	84	2. includes land used as a homesite that is part of or 24
85	85	contiguous to a parcel described in item 1 of this item; 25
86	86
87	87	(ii) owns personal property used to operate the agricultural land; 26
88	88	and 27
89	89
90	90	(iii) owns no other property. 28
91	91
92	92	[(4)] (5) “Bicounty commission” means: 29
93	93
94	94	(i) the Maryland–National Capital Park and Planning Commission; 30
95	95	HOUSE BILL 1324 3
96	96
97	97
98	98	(ii) the Washington Suburban Sanitary Commission; or 1
99	99
100	100	(iii) the Washington Suburban Transit Commission. 2
101	101
102	102	[(5)] (6) (i) “Dwelling” means: 3
103	103
104	104	1. a house that is: 4
105	105
106	106	A. used as the principal residence of the homeowner; and 5
107	107
108	108	B. actually occupied or expected to be actually occupied by 6
109	109	the homeowner for more than 6 months of a 12–month period beginning with the date of 7
110	110	finality for the taxable year for which the property tax credit under this section is sought; 8
111	111	and 9
112	112
113	113	2. the lot or curtilage on which the house is erected. 10
114	114
115	115	(ii) “Dwelling” includes: 11
116	116
117	117	1. a condominium unit that is occupied by an individual who 12
118	118	has a legal interest in the condominium; 13
119	119
120	120	2. an apartment in a cooperative apartment corporation that 14
121	121	is occupied by an individual who has a legal interest in the apartment; and 15
122	122
123	123	3. a part of real property used other than primarily for 16
124	124	residential purposes, if the real property is used as a principal residence by an individual 17
125	125	who has a legal interest in the real property. 18
126	126
127	127	[(6)] (7) “Family corporation” means a corporation that does not have any 19
128	128	stockholders other than the homeowner and the following members of the homeowner’s 20
129	129	family: 21
130	130
131	131	(i) a spouse or former spouse; 22
132	132
133	133	(ii) a child or stepchild; 23
134	134
135	135	(iii) a parent or stepparent; 24
136	136
137	137	(iv) a brother or sister; 25
138	138
139	139	(v) a son–in–law, daughter–in–law, stepson–in–law, or 26
140	140	stepdaughter–in–law; 27
141	141
142	142	(vi) a grandchild or stepgrandchild; or 28
143	143
144	144	(vii) a grandparent or stepgrandparent. 29 4 HOUSE BILL 1324
145	145
146	146
147	147
148	148	[(7)] (8) “Homeowner” means an individual who has a legal interest in a 1
149	149	dwelling OR AN ADDITIONAL RESIDENCE or who is an active member of an agricultural 2
150	150	ownership entity that has a legal interest in a dwelling OR AN ADDITIONAL RESIDENCE . 3
151	151
152	152	[(8)] (9) “Legal interest” means an interest in a dwelling OR AN 4
153	153	ADDITIONAL RESIDENCE : 5
154	154
155	155	(i) as a sole owner; 6
156	156
157	157	(ii) as a joint tenant; 7
158	158
159	159	(iii) as a tenant in common; 8
160	160
161	161	(iv) as a tenant by the entireties; 9
162	162
163	163	(v) through membership in a cooperative; 10
164	164
165	165	(vi) under a land installment contract, as defined in § 10–101 of the 11
166	166	Real Property Article; 12
167	167
168	168	(vii) as a holder of a life estate; or 13
169	169
170	170	(viii) as a settlor, grantor, or beneficiary of a trust if: 14
171	171
172	172	1. the settlor, grantor, or beneficiary of the trust does not pay 15
173	173	rent or other remuneration to reside in the dwelling OR ADDITIONAL RESIDE NCE; and 16
174	174
175	175	2. legal title to the dwelling OR ADDITIONAL RESIDE NCE is 17
176	176	held in the name of the trust or in the names of the trustees for the trust. 18
177	177
178	178	[(9)] (10) “Taxable assessment” means the assessment on which the 19
179	179	property tax rate was imposed in the preceding taxable year, adjusted by the phased–in 20
180	180	assessment increase resulting from a revaluation under § 8–104(c)(1)(iii) of this article, less 21
181	181	the amount of any assessment on which a property tax credit under this section is 22
182	182	authorized. 23
183	183
184	184	(c) (1) If a dwelling OR AN ADDITIONAL RESIDENCE is not used primarily for 24
185	185	residential purposes, the Department shall apportion the total property assessment 25
186	186	between the part of the dwelling OR ADDITIONAL RESIDE NCE that is used for residential 26
187	187	purposes and the part of the dwelling OR ADDITIONAL RESIDE NCE that is not used for 27
188	188	residential purposes. 28
189	189
190	190	(2) If a homeowner does not actually reside in a dwelling for the required 29
191	191	time period because of illness or need of special care and is otherwise eligible for a property 30 HOUSE BILL 1324 5
192	192
193	193
194	194	tax credit under this section, the homeowner may qualify for the property tax credit under 1
195	195	this section. 2
196	196
197	197	(3) If a homeowner otherwise eligible for a credit under this section does 3
198	198	not actually reside in a dwelling for the required time period because the dwelling is 4
199	199	damaged due to an accident or natural disaster, the homeowner may continue to qualify for 5
200	200	a credit under this section for the current taxable year and 2 succeeding taxable years even 6
201	201	if the dwelling has been removed from the assessment roll in accordance with § 10–304 of 7
202	202	this article. 8
203	203
204	204	(4) (i) For a homeowner who is an active member of an agricultural 9
205	205	ownership entity to qualify for the property tax credit under this section: 10
206	206
207	207	1. the dwelling OR ADDITIONAL RESIDE NCE must have 11
208	208	been owned and occupied by the active member: 12
209	209
210	210	A. at the time of its transfer to the agricultural ownership 13
211	211	entity; or 14
212	212
213	213	B. if the agricultural ownership entity is a limited liability 15
214	214	company and the dwelling OR ADDITIONAL RESIDE NCE was originally transferred to the 16
215	215	agricultural ownership entity as part of a conversion from a partnership under § 4A–211 of 17
216	216	the Corporations and Associations Article, then at the time of its transfer to the former 18
217	217	partnership; and 19
218	218
219	219	2. the agricultural ownership entity and the active member 20
220	220	who occupies the dwelling OR ADDITIONAL RESIDE NCE must file an application with the 21
221	221	Department establishing initial eligibility for the credit on or before June 30 for the 22
222	222	following taxable year and, at the request of the Department, must file an application in 23
223	223	any future year to verify continued eligibility. 24
224	224
225	225	(ii) Failure to file a timely application may result in disqualification 25
226	226	from the Homestead Tax Credit Program for the following taxable year. 26
227	227
228	228	[(iii) The credit may only be granted to one dwelling owned by the 27
229	229	agricultural ownership entity. 28
230	230
231	231	(iv) Participation in the credit program as the active member of an 29
232	232	agricultural ownership entity disqualifies any other dwellings owned by the active member 30
233	233	for the credit.] 31
234	234
235	235	(d) (1) Subject to the provisions of paragraph [(6)] (5) of this subsection, the 32
236	236	Department shall authorize and the State, a county, or a municipal corporation shall grant 33
237	237	a property tax credit under this section for a taxable year unless during the previous 34
238	238	taxable year: 35
239	239	6 HOUSE BILL 1324
240	240
241	241
242	242	(i) the dwelling OR ADDITIONAL RESIDENCE was transferred for 1
243	243	consideration to new ownership; 2
244	244
245	245	(ii) the value of the dwelling OR ADDITIONAL RESIDE NCE was 3
246	246	increased due to a change in the zoning classification of the dwelling OR ADDITIONAL 4
247	247	RESIDENCE initiated or requested by the homeowner or anyone having an interest in the 5
248	248	property; 6
249	249
250	250	(iii) the use of the dwelling OR ADDITIONAL RESIDE NCE was 7
251	251	changed substantially; or 8
252	252
253	253	(iv) the assessment of the dwelling OR ADDITIONAL RESIDE NCE 9
254	254	was clearly erroneous due to an error in calculation or measurement of improvements on 10
255	255	the real property. 11
256	256
257	257	(2) [A homeowner must actually reside in the dwelling by July 1 of the 12
258	258	taxable year for which the property tax credit under this section is to be allowed. 13
259	259
260	260	(3)] A homeowner may claim a property tax credit under this section for 14
261	261	[only 1] A dwelling OR AN ADDITIONAL RESIDENCE . 15
262	262
263	263	[(4)] (3) If a property tax credit under this section is less than $1 in any 16
264	264	taxable year, the tax credit may not be granted. 17
265	265
266	266	[(5)] (4) (i) If the dwelling OR ADDITIONAL RESIDENCE was 18
267	267	transferred for consideration in a deed dated on or after January 1 but before the beginning 19
268	268	of the next taxable year and the deed was recorded with the clerk of the circuit court or the 20
269	269	Department on or after July 1 but before September 1 of the next taxable year, the new 21
270	270	owner may submit a written application to the Department on or before September 1 of the 22
271	271	second taxable year following the date of the deed requesting that the date of the deed be 23
272	272	accepted by the Department as the date of transfer under paragraph (1) of this subsection. 24
273	273
274	274	(ii) 1. The applicant shall submit with the written application a 25
275	275	copy of the executed deed evidencing the date of the transfer. 26
276	276
277	277	2. If the applicant fails to submit a copy of the executed deed 27
278	278	as required under subsubparagraph 1 of this subparagraph, the Department shall deny the 28
279	279	application. 29
280	280
281	281	(iii) The date of the transfer under this paragraph is the effective date 30
282	282	of the deed as described under § 3–201 of the Real Property Article. 31
283	283
284	284	(iv) If a homeowner submits an eligible application under this 32
285	285	paragraph after May 1 of the first taxable year following the date of the deed and the 33
286	286	homeowner is due to receive a reduction in the homeowner’s property tax bill in the second 34
287	287	taxable year following the date of the deed as a result of the credit under this section, 35 HOUSE BILL 1324 7
288	288
289	289
290	290	property tax is not due on the dwelling OR ADDITIONAL RESIDE NCE for the second taxable 1
291	291	year following the date of the deed until 30 days after a revised tax bill is sent to the 2
292	292	homeowner. 3
293	293
294	294	[(6)] (5) (i) Except as provided under paragraph [(7)] (6) of this 4
295	295	subsection, to qualify for the credit under this section, a homeowner shall submit an 5
296	296	application for the credit to the Department as provided in this paragraph. 6
297	297
298	298	(ii) The application shall: 7
299	299
300	300	1. be made on the form that the Department provides; 8
301	301
302	302	2. provide the information required by the form; 9
303	303
304	304	3. include a statement by the homeowner under oath that the 10
305	305	facts stated in the application are true, correct, and complete; and 11
306	306
307	307	4. except as provided in subparagraph (iii) of this paragraph, 12
308	308	be filed on or before the May 1 preceding the first taxable year for which the property tax 13
309	309	credit under this section is to be allowed. 14
310	310
311	311	(iii) For a dwelling OR AN ADDITIONAL RESI DENCE that was last 15
312	312	transferred for consideration to new ownership on or before December 31, 2007, an 16
313	313	application shall be filed with the Department on or before December 30, 2013, or the 17
314	314	Department may not authorize and the State, county, and municipal corporation may not 18
315	315	grant the property tax credit under this section: 19
316	316
317	317	1. for the taxable year beginning July 1, 2014; and 20
318	318
319	319	2. for a taxable year beginning after June 30, 2015, unless an 21
320	320	application is filed as required under subparagraphs (i) and (ii) of this paragraph. 22
321	321
322	322	(iv) If a dwelling OR AN ADDITIONAL RESIDENCE previously 23
323	323	received a credit under this section and failed to qualify for 1 taxable year because of a 24
324	324	failure to file the application required under this paragraph, the Department: 25
325	325
326	326	1. shall grant the credit for the dwelling OR ADDITIONAL 26
327	327	RESIDENCE for the next following taxable year on the timely filing of the application by 27
328	328	the same homeowner who previously received the credit; and 28
329	329
330	330	2. shall calculate the prior year’s taxable assessment for the 29
331	331	dwelling OR ADDITIONAL RESIDE NCE as if the credit had not been lost for the 1 30
332	332	intervening taxable year. 31
333	333
334	334	(v) The Department shall provide a homeowner the option to submit 32
335	335	the application required under this paragraph electronically on the Department’s website. 33 8 HOUSE BILL 1324
336	336
337	337
338	338
339	339	[(7)] (6) If a homeowner submits an application to the Department under 1
340	340	this section and the Department determines that the homeowner was eligible for the credit 2
341	341	in the prior taxable year but failed to file an application for the credit as required under 3
342	342	this subsection: 4
343	343
344	344	(i) the homeowner shall be retroactively qualified for the 5
345	345	Homestead Property Tax Credit Program for the prior taxable year; and 6
346	346
347	347	(ii) the Department shall calculate the prior year’s taxable 7
348	348	assessment as if the credit had been granted for the prior taxable year. 8
349	349
350	350	(f) (1) The Department shall give notice of the possible property tax credit 9
351	351	under this section. 10
352	352
353	353	(2) In addition to any other notice the Department provides under this 11
354	354	subsection, the Department shall: 12
355	355
356	356	(i) identify homeowners who may be eligible but have failed to apply 13
357	357	for the property tax credit under this section; and 14
358	358
359	359	(ii) include a separate insert with each assessment notice sent under 15
360	360	§ 8–401 of this article to each homeowner identified under item (i) of this paragraph that 16
361	361	informs the homeowner that the homeowner may be eligible for the property tax credit 17
362	362	under this section and how to apply for the credit. 18
363	363
364	364	(3) In addition to any other notice the Department provides under this 19
365	365	subsection, the Department shall mail a notice to each individual who acquires residential 20
366	366	real property and has not applied for the credit under this section within a reasonable 21
367	367	period of time after the individual[: 22
368	368
369	369	(i)] acquires the property by recorded deed[; and 23
370	370
371	371	(ii) indicates that the property will be the individual’s principal 24
372	372	residence on the corresponding land instrument intake sheet described under § 3–104 of 25
373	373	the Real Property Article]. 26
374	374
375	375	(4) The notice required under paragraph (3) of this subsection shall: 27
376	376
377	377	(i) inform the individual that the individual may be eligible for the 28
378	378	property tax credit under this section; 29
379	379
380	380	(ii) contain information on how to apply for the credit; and 30
381	381
382	382	(iii) inform the individual that the individual may apply to the 31
383	383	Department to have the date of the deed accepted as the date of transfer of the property for 32
384	384	purposes of the credit as provided in subsection [(d)(5)] (D)(4) of this section. 33 HOUSE BILL 1324 9
385	385
386	386
387	387
388	388	(5) (i) The Department shall design a document concerning the credit 1
389	389	under this section that shall be presented to the buyer of residential property at the 2
390	390	settlement for the property by the person conducting the settlement. 3
391	391
392	392	(ii) The document under this paragraph shall include: 4
393	393
394	394	1. the following statement in conspicuous type: [“If you plan 5
395	395	to live in this home as your principal residence, you] “YOU may qualify for the homestead 6
396	396	property tax credit. The homestead property tax credit may significantly reduce the amount 7
397	397	of property taxes you owe.”; 8
398	398
399	399	2. instructions on how to apply for the credit online; and 9
400	400
401	401	3. a complete application for the credit and instructions on 10
402	402	how to submit the paper application to the Department. 11
403	403
404	404	(iii) The Department shall make the document under this paragraph 12
405	405	available on its website where it may be easily accessed by persons conducting settlements 13
406	406	for residential property. 14
407	407
408	408	(6) The Department shall ensure that the information it provides under 15
409	409	this subsection is accurate and up–to–date. 16
410	410
411	411	(g) A homeowner who meets the requirements of this section shall be granted the 17
412	412	property tax credit under this section against the State, county, and municipal corporation 18
413	413	property tax and any property tax imposed for a bicounty commission imposed on the real 19
414	414	property of the dwelling OR ADDITIONAL RESIDE NCE. 20
415	415
416	416	(i) (1) When property that has received a credit under this section for the 21
417	417	current taxable year includes improvements that are removed from the assessment roll 22
418	418	under § 10–304 of this article because of damage due to an accident or a natural disaster: 23
419	419
420	420	(i) the full benefit of the property tax abatement under § 10–304 of 24
421	421	this article may not be diminished by the amount of the credit; 25
422	422
423	423	(ii) the full benefit of that credit may not be diminished by the 26
424	424	property tax abatement under § 10–304 of this article and shall be reflected in the 27
425	425	assessment of the total property, including any new improvements, for the current taxable 28
426	426	year; and 29
427	427
428	428	(iii) the property shall be eligible to receive a credit under this section 30
429	429	for the current taxable year and the two succeeding taxable years regardless of the 31
430	430	existence or condition of the dwelling OR ADDITIONAL RESIDE NCE. 32
431	431
432	432	(2) Neither the calculation of the abatement nor the assessment under this 33
433	433	subsection shall include an assessment less than zero. 34 10 HOUSE BILL 1324
434	434
435	435
436	436
437	437	(k) The tax credit under this section shall be known as the homestead property 1
438	438	tax credit. 2
439	439
440	440	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 3
441	441	1, 2024, and shall be applicable to all taxable years beginning after June 30, 2024. 4