Mayor Brandon Scott is encouraging eligible Baltimore residents to apply for the Maryland Property Tax Credit, three weeks ahead of an Oct. 1 deadline.
“We know that everyone is hurting because of the fall out from this pandemic,” the Democrat said at a news conference Tuesday. “We want to keep people in their homes so that they can pass their homes on to the next generation to create generational wealth in families and communities throughout Baltimore.”
The state tax credit applies to homeowners who own their primary residence, have a gross household income of less than $60,000 and have a net worth less than $200,000, not including the value of their primary residence or retirement savings.
It sets a tiered property tax limit for different income levels based on the amount by which the property tax exceeds a percentage of a household’s income. For example, a household with a $20,000 income that receives the credit would have their property taxes capped at $780.
For homeowners 70 years old or older, the tax credit is retroactive for three prior years, each of which require separate applications.
Those who fail to pay their property taxes will be charged delinquency fees and interest, as well as the possibility of having their homes end up on the city’s tax sale list. Tax sale is an annual event in which Baltimore attempts to recoup revenue by auctioning property liens to third-party investors, who can charge debtors interest and legal fees on top of those liens. If that money remains unpaid, investors may foreclose on the property — and original homeowners are generally not owed any equity from the foreclosure.
Owner-occupied homes end up on Baltimore City’s sale for owing $750 or more in liens, which include delinquent property taxes as well as unpaid fees such as sanitation violations. Under pressure from housing advocates, Scott removed 2,500 owner-occupied homes from the city's annual tax sale last spring.
“That was a necessary and immediate measure to address the issue. But we have a plan for the long term and to equip our residents with the tools and information they need to ensure that they can return to their homes,” he said. “The Homeowners’ Property Tax Credit is there to help keep money in the pockets of our legacy residents.”
Allison Harris, the director of Pro Bono Resource Center of Maryland’s Home Preservation Project, runs year round pro bono legal clinics to help homeowners facing tax sale. Over the past six years, the organization has assisted about 700 homeowners at risk of losing their homes. Ending up on the tax sale list is usually the result of an inability to pay one's property taxes, she said.
“This is an issue of financial ability. Our clients want to pay their taxes. They want to be good citizens. They want to do their part and do the right thing,” she said. “But finances are tough and everyone is doing their best to make ends meet.”
The city does not collect demographic data on those facing tax sale, but the demographic data of those who attend the pro bono tax sale legal clinics paint a stark picture of inequity. Three-quarters of attendees are seniors, three-quarters have household incomes of less than $30,000 and nearly half are disabled. A large majority identify as Black; attendees also largely own their homes outright and do not have a mortgage.
The homeowner's tax credit is key to preventing the loss of Baltimore family homes to tax foreclosure, Harris said. Last spring, she worked with several clients who landed on the tax sale list for the first time because their original applications for the credit were lost in the mail, including a 68-year-old woman who was hit with a property tax bill of more than $3,000.
“The client had mailed her homeowner's tax credit application in August of 2020, as she has every year for the past few years, but the credit was not applied,” Harris said. “She was unable to reach anyone at the tax office by phone, and she could not go to a library to access the computer to file online.”
After assistance from the Pro Bono Resource Center of Maryland, she received the credit, which lowered her bill to $459. She was able to pay up to remove her property from the tax sale list and avoid its risks.
“Accessing the credit preserves homeownership, preserves the equity that families have spent decades building on their properties and helps to ensure the transfer of intergenerational wealth within our neighborhoods,” Harris said.
Marceline White is the executive director of the Maryland Consumer Rights Coalition, which runs the Securing Older Adult Resources Program (SOAR) tax credit hotline. She recalled a city resident over the age of 70 her organization assisted last year. He applied for the property tax credit as well as retroactive credits and earned back $5,888.
“That's more than enough to have saved his home from tax sale and give him a little bit of money to spend. On average, we’re able to bring back about a thousand dollars for homeowners,” she said. “It's real money that's right there for you.”
She added that many of her older clients have shared that they’ve felt uncomfortable asking for the tax credit.
“This is here for you,” White said. “The state put this in place for you to help you age in place and live in your home with dignity. This is here for you. We want you to call. That's why we're doing this. We want you to take advantage of this credit.”
Former longtime Councilwoman Mary Pat Clarke said that many of her former constituents encountered more difficulty than usual in filing for this year’s credit, due to pandemic-related closures of government buildings, which stock paper applications.
“A lot of the ladies and men who applied for this every year — and you must apply every year based on income — didn't have a way to go pick up a form… and they didn't have computers,” she said. “There were a lot of people out here who knew they needed to get it, but didn't know how.”
Now, applications are available at any Enoch Pratt Free Library location. Homeowners can also access the tax credit application and assistance by calling the MCRC’s SOAR tax credit hotline at 443-961-6220 or applying online. Online applications will be reviewed 60 to 90 days after they are submitted, which is faster than those received by mail, according to the State Department of Assessments & Taxation’s website.
