Homeowner Tax Incentives

If you are an eligible home owner, you can make use of a variety of programs which will ease your property tax burden. Here are details of a few of the popular tax credit programs. For information on more such programs, visit www.baltimorecity.gov/government/finance/taxincentives.php.

Federal Homebuyer Tax Credit

This program was signed by President Barack Obama on 17th February 2009. The Federal Homebuyer Tax Credit program is a part of the 'American Recovery and Reinvestment Act of 2009'.

If the sale price of your property is more than $80,000, you are eligible for a tax credit of $8000 which can be claimed on your tax return. For a property costing lesser than the stipulated amount, you are eligible for a tax credit of 10% of your home value.

In order to be eligible for this program, you must have settled on your home by 30th November 2009.

Other conditions include -

Being a first time buyer, which means there must have been no property within America in your name for the past three years.

Income limit for eligibility include less than $75,000 annually for an individual and less than $150,000 for couples.

Home purchase must be essentially after 1st January 2009 and settlement before 1st December 2009. If you sell your home within the next three years, you must repay the credit in full. However, if you occupy the home for three years, the credit is forgiven.

For more information on this program, it is highly recommended to consult your tax professional, realtor or lender. You can also find information on the website of the National Association of Realtors hosted by the Greater Baltimore Board of Realtors.

You benefit with a 50% property tax credit for five years in the first taxable year and this declines by 10% points subsequently.

It is not possible to pass on the credit to subsequent owners as it applies only to the first owner of the constructed home.

For the five year period of credit, it is necessary for the owner to occupy the constructed residence.

In order to apply under this scheme, it is necessary for the owners to send in application within 90 days of first tax assessment notice.

You can find more details at - www.baltimorecity.gov/government/finance/taxincentives.php

Home Improvement Property Tax Credit

With the help of this program, home owners can avail of incentives in order to renovate or make improvements on their properties.

Benefits include a tax credit for a period of five years. 100% relief on property taxes is provided during the first year on the increased value. Credit relief goes down by 20% points every subsequent year.

In order to be eligible for this scheme, it is important to ensure that -

You can refer www.baltimorecity.gov/government/finance/taxincentives.php for details.

Homeowner's Tax Credit

This tax credit program which is unique to the State of Maryland provides limits on property taxes to be paid depending on the person's income. The amount exceeded by the property tax with respect to a percentage of your income is taken into account to determine the tax credit.

Other eligibility criteria include -

Combined household income not more than $60,000

Property must be owned by you or you must have a legal interest in it

You must be residing in the said property you are seeking tax credit for at least the past 6 months

Apart from the property value, your net worth must not exceed $200,000

Applications must be sent in before 1st September every year to the Department of Assessments and Taxation.

www.dat.state.md.us/sdatweb/htc.html provides you with more details on this program.

Renter's Tax Credit

This is a program that offers renters tax credits if they meet certain requirements.

To benefit from this program, you must be either disabled or above the age of 60. Alternately, if you are under 60, you must have a dependent below 18 living with you. You must not be already enjoying subsidies offered by Federal or State or living in a public housing.

Similar to the Homeowner's Tax Credit Program, it operates on the reasoning that property taxes are indirectly burdened on renters in the form of hiked up rent. Depending on the portion of rent that is fixed in towards property taxes and in relation to the renter's income, the credit amount is determined which can even amount to $750.

In order to be eligible for this scheme, the property must be a part of an individual home or apartment, condominium, co-op, duplex, mobile home pad or house trailer. It must be the renter's primary residence in Maryland for at least six months in a year.

Applicant must be responsible legally for the rent paid and must have a leasehold interest in the home. More tax limit and income charts can be found at www.dat.state.md.us/sdatweb/rtc.html

Detailed information on this program can be found at www.dat.state.md.us/sdatweb/rtc.html

Homestead Property Tax Credit

Homeowners usually are lost when there is a large increase in the assessment of their principle residence. In order to deal with this, the Homestead Property Tax Credit places a limit on the assessment increase to a fixed percentage. This credit is worked out based on increase in assessment over 4% annually. If the increase in market value is above the fixed limit, it is not necessary for property owners to pay the tax on the increase.

In order to establish eligibility for this program, it is necessary for home owners to submit application one-time. Applications will be mailed both to new purchasers as well as to one third of home owners by December end every year. Owner must use the dwelling as principle residence and must have lived there for at least six months.

Details can be found at www.dat.state.md.us/sdatweb/homestead.html or www.baltimorecity.gov/government/finance/taxincentives.php

Federal Programs for Green Tax Credits

If you are a home owner who makes green choices for renovation or during property purchase, you are eligible for this tax credit program.

Tax Credits for Home Energy Efficiency Improvement

If you purchasing an energy efficiency product such as heating, roofs, doors, insulation, energy efficient windows and cooling equipments, you are eligible as a home owner, a 30% tax credit of up to $1500. You must however purchase and install between 1st January 2009 and 31st December 2010.

Tax Credits for Residential Renewable Energy

Home owners opting for renewable energy systems for their homes and planning to place them in service before 31st December 2016 are eligible for a 30% tax credit. Systems that are eligible include residential fuel cells, geothermal heat pumps, micro turbine, wind and solar energy. Find more information at http://www.energy.gov/taxbreaks.htm

State of Maryland Green Tax Credits Programs

If you own a home that uses renewable energy for cooling and heating requirements, you are eligible for a lot of incentives offered by the State of Maryland, details of which can be found at http://energy.maryland.gov/incentives/residential/

Contact us to learn more about these programs.

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