County debates lowering property tax credit cap
ELKTON — A bill to decrease the amount county property tax assessments could rise in any one year was introduced last week during a county council meeting.
The policy, known as the Maryland Homestead Tax Credit, was designed to help homeowners deal with large assessment increases on their principal residence during times of escalating home prices.
The state has set this limit at 10 percent for its portion of the tax bill. However, counties and towns are allowed to reduce their portion below 10 percent of the tax bill.
Cecil County lowered its rate to 8 percent effective July 1, 2006. In simple terms, a credit is applied to assessments that go up at a rate of greater than 10 percent to bring it down to 8 percent for tax purposes, not actual market value.
For example, if an old assessment was $100,000 and a new phased-in assessment for the first year is $120,000, then limiting the increased assessment to only 10 percent would translate to $110,000.
That difference of $10,000 is the amount to which the tax credit would apply.
All homeowners can apply for this credit by submitting an application to the state assessment office. Certain rules do apply to be eligible.
Councilwoman Diana Broomell introduced the new legislation to lower the current rate of 108 percent to a proposed rate of 104 percent. If it passes, then it would take effect July 1, 2015.
County Finance Director Winston Robinson will prepare a report on the fiscal impact on the proposal prior to the public hearing on this proposal set for 7 p.m. on Tuesday, Aug. 19, in the Elk Room of the County Administration Building in Elkton.
The county council is expected to vote on it on Sept. 2.
