MD Laws Impacting Affordable Housing and Property Tax Credits

Every two years, our MD Agents are required to take 15 hours continuing education. Below are some of the bullet points from that education that affect Affordable Housing and Property Tax Credits:

The mayor and city council of Baltimore City or the governing authority of the taxing locality may continue to provide the tax credit to the surviving spouse of a disabled veteran.

The amount of property tax credit a disabled veteran qualifies for depends on the degree of disability: A veteran with a service-connected disability of between 75-99% may receive a tax credit of 50%; a veteran with a service-connected disability of between 50% and 74% may receive a tax credit of 25%.

For a disabled veterans’ property to qualify for a property tax credit, it must be the veteran’s legal residence and not occupied by more than two families.

Veterans who believe they qualify for a property tax credit must apply with the taxing county or municipality by providing a copy of the veteran’s discharge papers and a certification of the disability on a form provided by the taxing authority.

With the passage of HB 257/SB 417, tax credits may be granted for veterans with at least a 50% service-related disability. The disability must be reasonably assumed to be permanent (e.g., blindness).

Tax credits are available to disabled military personnel and their surviving spouses even when they’re not retired (they may be retired, active duty, or honorably discharged).

Surviving spouses of deceased military personnel who were receiving disabled military tax credits may not continue receiving those credits when they remarry.

It’s up to each local government to set eligibility requirements for the disabled military personnel tax credit, but it may not exceed 20% of the total tax or be granted for longer than five years. Depending on the jurisdiction, there may be a requirement to have resided in the same property for up to 40 years.

HB 759, effective July 1, 2020 for tax years beginning after December 31, 2019, states that condominiums and cooperatives may now qualify for historic tax credits when the rehabilitation project involves common elements of the structure.

To qualify for Maryland’s Historic Revitalization Tax Credit program, which has been in existence for nearly two decades, a property must be registered in the National Register of Historic Places or located within a local historic district or deemed by the Maryland Historic Trust as contributing to the significance of a historic district.

Historic tax credits are available for qualified rehabilitation projects on primary residences, secondary residences and commercial properties (not small commercial projects, but properties other than a single-family, owner-occupied residence).

The Historic Revitalization Tax Credit may be transferred to a third party involved in the transaction (e.g., a bank or other investor). Transferability helps monetize the credit thereby increasing the pool of potential investors for projects.

SB 48 extends from September 1 to October 1 the amount of time available for tax payers to apply for Renters or Homeowners tax credits (note: not the homestead exemption). It requires the State Department of Assessments and Taxation (SDAT) to make property tax credit application form available by February 15 for each taxable year.

Tax credits for energy storage systems are calculated as 30 percent of the total installed cost of the system. This credit may not exceed $5,000 for residential applicants or $150,000 for commercial applicants.

A deed recorded after the start of Maryland’s new fiscal year (July 1) may use the date of transfer of the property (between January 1 – July 1) to ensure the homeowner’s homestead tax credit isn’t delayed an additional year. However, the taxpayer must have taken possession as of July 1.

The property tax credit for newly constructed and “substantially rehabilitated” dwellings in Baltimore City has been extended June 30, 2025. Eligible properties are those assessed at $500,000 or less. The tax credit may be applied to new construction or substantially rehabilitated property.

HB 980/SB 775 redefined what a taxpayer was for the purpose of qualifying for an energy storage system tax credit. It also increased the credit that a commercial owner could receive.

For the purposes of qualifying for a Baltimore City property tax credit, “substantially rehabilitated” means it has undergone repair, replacement or improvement of two or more major building components for which the direct construction costs incurred by the owner were greater than $6,500 or 30% of the property’s rehabilitated assessed value.

Source: The CE Shop