EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1324*
HOUSE BILL 1324
Q1 4lr2662
By: Delegates Wivell, Baker, and Valentine
Introduced and read first time: February 9, 2024
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Homestead Property Tax Credit – Eligible Properties – Alteration 2
FOR the purpose of expanding eligibility for the homestead property tax credit to include 3
additional residences; and generally relating to the homestead property tax credit. 4
BY repealing and reenacting, with amendments, 5
Article – Tax – Property 6
Section 9–105(a), (c)(1) and (4), (d), (f), (g), and (i) 7
Annotated Code of Maryland 8
(2019 Replacement Volume and 2023 Supplement) 9
BY repealing and reenacting, without amendments, 10
Article – Tax – Property 11
Section 9–105(c)(2) and (3) and (k) 12
Annotated Code of Maryland 13
(2019 Replacement Volume and 2023 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Tax – Property 17
9–105. 18
(a) (1) In this section the following words have the meanings indicated. 19
(2) (I) “ADDITIONAL RESIDENCE ” MEANS A HOUSE AND TH E LOT 20
OR CURTILAGE ON WHIC H THE HOUSE IS ERECT ED. 21
(II) “ADDITIONAL RESIDENCE ” INCLUDES: 22 2 HOUSE BILL 1324
1. A CONDOMINIUM UNIT OF AN INDIVIDUAL WHO HA S A 1
LEGAL INTEREST IN TH E CONDOMINIUM ; 2
2. AN APARTMENT IN A CO OPERATIVE APARTMENT 3
CORPORATION OF AN INDIVIDUAL WHO HA S A LEGAL INTEREST I N THE APARTMENT ; 4
AND 5
3. A PART OF REAL PROPE RTY USED OTHER THAN 6
PRIMARILY FOR RESIDE NTIAL PURPOSES , IF THE REAL PROPERTY IS USED AS A 7
RESIDENCE BY AN INDIVIDUAL WHO HAS A LEGAL INTEREST IN THE REAL 8
PROPERTY. 9
[(2)] (3) “Active member” means: 10
(i) a shareholder in a family corporation; 11
(ii) a partner in a general partnership; or 12
(iii) a member of a limited liability company or partner in a limited 13
liability partnership who has or shares the authority to manage, control, and operate the 14
limited liability company or limited liability partnership and who shares the assets and 15
earnings of the limited liability company or limited liability partnership under an operating 16
agreement under § 4A–402 of the Corporations and Associations Article or under a 17
partnership agreement. 18
[(3)] (4) “Agricultural ownership entity” means a family corporation, 19
general partnership, limited liability company, or limited liability partnership that: 20
(i) owns real property that: 21
1. includes land receiving an agricultural use assessment 22
under § 8–209 of this article; and 23
2. includes land used as a homesite that is part of or 24
contiguous to a parcel described in item 1 of this item; 25
(ii) owns personal property used to operate the agricultural land; 26
and 27
(iii) owns no other property. 28
[(4)] (5) “Bicounty commission” means: 29
(i) the Maryland–National Capital Park and Planning Commission; 30
HOUSE BILL 1324 3
(ii) the Washington Suburban Sanitary Commission; or 1
(iii) the Washington Suburban Transit Commission. 2
[(5)] (6) (i) “Dwelling” means: 3
1. a house that is: 4
A. used as the principal residence of the homeowner; and 5
B. actually occupied or expected to be actually occupied by 6
the homeowner for more than 6 months of a 12–month period beginning with the date of 7
finality for the taxable year for which the property tax credit under this section is sought; 8
and 9
2. the lot or curtilage on which the house is erected. 10
(ii) “Dwelling” includes: 11
1. a condominium unit that is occupied by an individual who 12
has a legal interest in the condominium; 13
2. an apartment in a cooperative apartment corporation that 14
is occupied by an individual who has a legal interest in the apartment; and 15
3. a part of real property used other than primarily for 16
residential purposes, if the real property is used as a principal residence by an individual 17
who has a legal interest in the real property. 18
[(6)] (7) “Family corporation” means a corporation that does not have any 19
stockholders other than the homeowner and the following members of the homeowner’s 20
family: 21
(i) a spouse or former spouse; 22
(ii) a child or stepchild; 23
(iii) a parent or stepparent; 24
(iv) a brother or sister; 25
(v) a son–in–law, daughter–in–law, stepson–in–law, or 26
stepdaughter–in–law; 27
(vi) a grandchild or stepgrandchild; or 28
(vii) a grandparent or stepgrandparent. 29 4 HOUSE BILL 1324
[(7)] (8) “Homeowner” means an individual who has a legal interest in a 1
dwelling OR AN ADDITIONAL RESIDENCE or who is an active member of an agricultural 2
ownership entity that has a legal interest in a dwelling OR AN ADDITIONAL RESIDENCE . 3
[(8)] (9) “Legal interest” means an interest in a dwelling OR AN 4
ADDITIONAL RESIDENCE : 5
(i) as a sole owner; 6
(ii) as a joint tenant; 7
(iii) as a tenant in common; 8
(iv) as a tenant by the entireties; 9
(v) through membership in a cooperative; 10
(vi) under a land installment contract, as defined in § 10–101 of the 11
Real Property Article; 12
(vii) as a holder of a life estate; or 13
(viii) as a settlor, grantor, or beneficiary of a trust if: 14
1. the settlor, grantor, or beneficiary of the trust does not pay 15
rent or other remuneration to reside in the dwelling OR ADDITIONAL RESIDE NCE; and 16
2. legal title to the dwelling OR ADDITIONAL RESIDE NCE is 17
held in the name of the trust or in the names of the trustees for the trust. 18
[(9)] (10) “Taxable assessment” means the assessment on which the 19
property tax rate was imposed in the preceding taxable year, adjusted by the phased–in 20
assessment increase resulting from a revaluation under § 8–104(c)(1)(iii) of this article, less 21
the amount of any assessment on which a property tax credit under this section is 22
authorized. 23
(c) (1) If a dwelling OR AN ADDITIONAL RESIDENCE is not used primarily for 24
residential purposes, the Department shall apportion the total property assessment 25
between the part of the dwelling OR ADDITIONAL RESIDE NCE that is used for residential 26
purposes and the part of the dwelling OR ADDITIONAL RESIDE NCE that is not used for 27
residential purposes. 28
(2) If a homeowner does not actually reside in a dwelling for the required 29
time period because of illness or need of special care and is otherwise eligible for a property 30 HOUSE BILL 1324 5
tax credit under this section, the homeowner may qualify for the property tax credit under 1
this section. 2
(3) If a homeowner otherwise eligible for a credit under this section does 3
not actually reside in a dwelling for the required time period because the dwelling is 4
damaged due to an accident or natural disaster, the homeowner may continue to qualify for 5
a credit under this section for the current taxable year and 2 succeeding taxable years even 6
if the dwelling has been removed from the assessment roll in accordance with § 10–304 of 7
this article. 8
(4) (i) For a homeowner who is an active member of an agricultural 9
ownership entity to qualify for the property tax credit under this section: 10
1. the dwelling OR ADDITIONAL RESIDE NCE must have 11
been owned and occupied by the active member: 12
A. at the time of its transfer to the agricultural ownership 13
entity; or 14
B. if the agricultural ownership entity is a limited liability 15
company and the dwelling OR ADDITIONAL RESIDE NCE was originally transferred to the 16
agricultural ownership entity as part of a conversion from a partnership under § 4A–211 of 17
the Corporations and Associations Article, then at the time of its transfer to the former 18
partnership; and 19
2. the agricultural ownership entity and the active member 20
who occupies the dwelling OR ADDITIONAL RESIDE NCE must file an application with the 21
Department establishing initial eligibility for the credit on or before June 30 for the 22
following taxable year and, at the request of the Department, must file an application in 23
any future year to verify continued eligibility. 24
(ii) Failure to file a timely application may result in disqualification 25
from the Homestead Tax Credit Program for the following taxable year. 26
[(iii) The credit may only be granted to one dwelling owned by the 27
agricultural ownership entity. 28
(iv) Participation in the credit program as the active member of an 29
agricultural ownership entity disqualifies any other dwellings owned by the active member 30
for the credit.] 31
(d) (1) Subject to the provisions of paragraph [(6)] (5) of this subsection, the 32
Department shall authorize and the State, a county, or a municipal corporation shall grant 33
a property tax credit under this section for a taxable year unless during the previous 34
taxable year: 35
6 HOUSE BILL 1324
(i) the dwelling OR ADDITIONAL RESIDENCE was transferred for 1
consideration to new ownership; 2
(ii) the value of the dwelling OR ADDITIONAL RESIDE NCE was 3
increased due to a change in the zoning classification of the dwelling OR ADDITIONAL 4
RESIDENCE initiated or requested by the homeowner or anyone having an interest in the 5
property; 6
(iii) the use of the dwelling OR ADDITIONAL RESIDE NCE was 7
changed substantially; or 8
(iv) the assessment of the dwelling OR ADDITIONAL RESIDE NCE 9
was clearly erroneous due to an error in calculation or measurement of improvements on 10
the real property. 11
(2) [A homeowner must actually reside in the dwelling by July 1 of the 12
taxable year for which the property tax credit under this section is to be allowed. 13
(3)] A homeowner may claim a property tax credit under this section for 14
[only 1] A dwelling OR AN ADDITIONAL RESIDENCE . 15
[(4)] (3) If a property tax credit under this section is less than $1 in any 16
taxable year, the tax credit may not be granted. 17
[(5)] (4) (i) If the dwelling OR ADDITIONAL RESIDENCE was 18
transferred for consideration in a deed dated on or after January 1 but before the beginning 19
of the next taxable year and the deed was recorded with the clerk of the circuit court or the 20
Department on or after July 1 but before September 1 of the next taxable year, the new 21
owner may submit a written application to the Department on or before September 1 of the 22
second taxable year following the date of the deed requesting that the date of the deed be 23
accepted by the Department as the date of transfer under paragraph (1) of this subsection. 24
(ii) 1. The applicant shall submit with the written application a 25
copy of the executed deed evidencing the date of the transfer. 26
2. If the applicant fails to submit a copy of the executed deed 27
as required under subsubparagraph 1 of this subparagraph, the Department shall deny the 28
application. 29
(iii) The date of the transfer under this paragraph is the effective date 30
of the deed as described under § 3–201 of the Real Property Article. 31
(iv) If a homeowner submits an eligible application under this 32
paragraph after May 1 of the first taxable year following the date of the deed and the 33
homeowner is due to receive a reduction in the homeowner’s property tax bill in the second 34
taxable year following the date of the deed as a result of the credit under this section, 35 HOUSE BILL 1324 7
property tax is not due on the dwelling OR ADDITIONAL RESIDE NCE for the second taxable 1
year following the date of the deed until 30 days after a revised tax bill is sent to the 2
homeowner. 3
[(6)] (5) (i) Except as provided under paragraph [(7)] (6) of this 4
subsection, to qualify for the credit under this section, a homeowner shall submit an 5
application for the credit to the Department as provided in this paragraph. 6
(ii) The application shall: 7
1. be made on the form that the Department provides; 8
2. provide the information required by the form; 9
3. include a statement by the homeowner under oath that the 10
facts stated in the application are true, correct, and complete; and 11
4. except as provided in subparagraph (iii) of this paragraph, 12
be filed on or before the May 1 preceding the first taxable year for which the property tax 13
credit under this section is to be allowed. 14
(iii) For a dwelling OR AN ADDITIONAL RESI DENCE that was last 15
transferred for consideration to new ownership on or before December 31, 2007, an 16
application shall be filed with the Department on or before December 30, 2013, or the 17
Department may not authorize and the State, county, and municipal corporation may not 18
grant the property tax credit under this section: 19
1. for the taxable year beginning July 1, 2014; and 20
2. for a taxable year beginning after June 30, 2015, unless an 21
application is filed as required under subparagraphs (i) and (ii) of this paragraph. 22
(iv) If a dwelling OR AN ADDITIONAL RESIDENCE previously 23
received a credit under this section and failed to qualify for 1 taxable year because of a 24
failure to file the application required under this paragraph, the Department: 25
1. shall grant the credit for the dwelling OR ADDITIONAL 26
RESIDENCE for the next following taxable year on the timely filing of the application by 27
the same homeowner who previously received the credit; and 28
2. shall calculate the prior year’s taxable assessment for the 29
dwelling OR ADDITIONAL RESIDE NCE as if the credit had not been lost for the 1 30
intervening taxable year. 31
(v) The Department shall provide a homeowner the option to submit 32
the application required under this paragraph electronically on the Department’s website. 33 8 HOUSE BILL 1324
[(7)] (6) If a homeowner submits an application to the Department under 1
this section and the Department determines that the homeowner was eligible for the credit 2
in the prior taxable year but failed to file an application for the credit as required under 3
this subsection: 4
(i) the homeowner shall be retroactively qualified for the 5
Homestead Property Tax Credit Program for the prior taxable year; and 6
(ii) the Department shall calculate the prior year’s taxable 7
assessment as if the credit had been granted for the prior taxable year. 8
(f) (1) The Department shall give notice of the possible property tax credit 9
under this section. 10
(2) In addition to any other notice the Department provides under this 11
subsection, the Department shall: 12
(i) identify homeowners who may be eligible but have failed to apply 13
for the property tax credit under this section; and 14
(ii) include a separate insert with each assessment notice sent under 15
§ 8–401 of this article to each homeowner identified under item (i) of this paragraph that 16
informs the homeowner that the homeowner may be eligible for the property tax credit 17
under this section and how to apply for the credit. 18
(3) In addition to any other notice the Department provides under this 19
subsection, the Department shall mail a notice to each individual who acquires residential 20
real property and has not applied for the credit under this section within a reasonable 21
period of time after the individual[: 22
(i)] acquires the property by recorded deed[; and 23
(ii) indicates that the property will be the individual’s principal 24
residence on the corresponding land instrument intake sheet described under § 3–104 of 25
the Real Property Article]. 26
(4) The notice required under paragraph (3) of this subsection shall: 27
(i) inform the individual that the individual may be eligible for the 28
property tax credit under this section; 29
(ii) contain information on how to apply for the credit; and 30
(iii) inform the individual that the individual may apply to the 31
Department to have the date of the deed accepted as the date of transfer of the property for 32
purposes of the credit as provided in subsection [(d)(5)] (D)(4) of this section. 33 HOUSE BILL 1324 9
(5) (i) The Department shall design a document concerning the credit 1
under this section that shall be presented to the buyer of residential property at the 2
settlement for the property by the person conducting the settlement. 3
(ii) The document under this paragraph shall include: 4
1. the following statement in conspicuous type: [“If you plan 5
to live in this home as your principal residence, you] “YOU may qualify for the homestead 6
property tax credit. The homestead property tax credit may significantly reduce the amount 7
of property taxes you owe.”; 8
2. instructions on how to apply for the credit online; and 9
3. a complete application for the credit and instructions on 10
how to submit the paper application to the Department. 11
(iii) The Department shall make the document under this paragraph 12
available on its website where it may be easily accessed by persons conducting settlements 13
for residential property. 14
(6) The Department shall ensure that the information it provides under 15
this subsection is accurate and up–to–date. 16
(g) A homeowner who meets the requirements of this section shall be granted the 17
property tax credit under this section against the State, county, and municipal corporation 18
property tax and any property tax imposed for a bicounty commission imposed on the real 19
property of the dwelling OR ADDITIONAL RESIDE NCE. 20
(i) (1) When property that has received a credit under this section for the 21
current taxable year includes improvements that are removed from the assessment roll 22
under § 10–304 of this article because of damage due to an accident or a natural disaster: 23
(i) the full benefit of the property tax abatement under § 10–304 of 24
this article may not be diminished by the amount of the credit; 25
(ii) the full benefit of that credit may not be diminished by the 26
property tax abatement under § 10–304 of this article and shall be reflected in the 27
assessment of the total property, including any new improvements, for the current taxable 28
year; and 29
(iii) the property shall be eligible to receive a credit under this section 30
for the current taxable year and the two succeeding taxable years regardless of the 31
existence or condition of the dwelling OR ADDITIONAL RESIDE NCE. 32
(2) Neither the calculation of the abatement nor the assessment under this 33
subsection shall include an assessment less than zero. 34 10 HOUSE BILL 1324
(k) The tax credit under this section shall be known as the homestead property 1
tax credit. 2
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 3
1, 2024, and shall be applicable to all taxable years beginning after June 30, 2024. 4