Homestead Tax Credit: Not for Rentals

The State of Maryland has a tax credit that’s available to homeowners, to offset the high property taxes — this credit is for owner-occupied dwellings only, and not to be used for rental properties where the homeowner does not reside.

If you move away, and wish to rent out your property instead of selling it, you must contact your local assessment office and notify them of the change in occupancy status. In Baltimore City, the contact information is as follows:

Baltimore City Assessments
Wm D. Schaefer Tower
6 Saint Paul St., 11th Floor
Baltimore, Maryland 21202-1608
Hours: 8:00 to 5:00
(410) 767-8250
FAX (410) 333-4626
E-mail: sdat.balt[email protected]

For other Maryland municipalties, you can download this PDF.

The penalty for wrongfully claiming the Homestead Tax Credit can include the following, under Section 9-105 Tax-Property Article of the Maryland Annotated Code:

(1) A person who has been granted a property tax credit under this section and is subsequently found to not qualify for the credit by the Department shall be assessed all State, county, and municipal corporation property tax otherwise due for each taxable year the person did not qualify to receive the credit.

(2) (i) If a person is found by the Department to have willfully misrepresented facts regarding qualification for the property tax credit under this section, the person shall be assessed a penalty equal to 25% of the amount of the property tax credit received during each taxable year for which the person did not qualify.

(ii) The amount of the penalty shall be separately itemized on the person’s property tax bill and constitutes a lien on the property until:

1. payment of the penalty in full; or

2. if the property is sold in an action to foreclose on a mortgage or deed of trust:

A. a copy of the court order ratifying the foreclosure sale is provided to the supervisor of assessments for the county in which the residential property is located; or

B. an instrument of writing transferring the property is recorded in the land records of the county in which the property is located.