HB 1289
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 1289 (Delegate Amprey)
Ways and Means
Homestead Property Tax Credit - Notice Requirements and Application Waiver
for First-Time Homebuyers
This bill requires a specified written notice regarding the homestead property tax credit to
be (1) included in a contract of sale of residential property to a first-time homebuyer who
intends to occupy the property as their principal residence and (2) delivered to
each homeowner within a one-mile radius at the time of the initial sale of a development
containing more than 12 lots to be governed under the Maryland Homeowners Association
(HOA) Act. The State Department of Assessments and Taxation (SDAT) must develop a
single standardized form containing a statement that provides details, including eligibility
requirements, for the homestead property tax credit. The bill takes effect June 1, 2021.
Fiscal Summary
State Effect: SDAT can develop the required form with existing resources. Revenues are
not directly affected.
Local Effect: The bill does not directly affect local government finances or operations.
Small Business Effect: Minimal.
Analysis
Bill Summary: The statement required as part of a first-time homebuyer’s contract must
be dated and signed by the buyer and included in or attached to the contract. A vender of
lots within a development that will be subject to an HOA must (1) in good faith make a
reasonable effort to identify the individuals who should be provided the statement
regarding the tax credit and (2) deliver the statement in a manner that produces a record of
the delivery or attempted delivery. The bill specifies that existing statutory provisions that
require homeowners to send an application for the tax credit do not apply to first-time
homebuyers. SDAT must develop a single standardized form that is available for the
purposes as established in the bill.
Current Law: The Homestead Property Tax Credit Program (assessment caps) provides
tax credits against State, county, and municipal real property taxes for owner-occupied
residential properties for the amount of real property taxes resulting from an annual
assessment increase that exceeds a certain percentage or “cap” in any given year. The State
requires the cap on assessment increases to be set at 10% for State property tax purposes;
however, local governments have the authority to lower the cap. A majority of local
subdivisions have assessment caps below 10% in fiscal 2021, as shown in Exhibit 1.
Exhibit 1
County Assessment Caps
County FY 2021
Allegany 4%
Anne Arundel 2%
Baltimore City 4%
Baltimore 4%
Calvert 10%
Caroline 5%
Carroll 5%
Cecil 4%
Charles 7%
Dorchester 5%
Frederick 5%
Garrett 5%
Harford 5%
Howard 5%
Kent 5%
Montgomery 10%
Prince George’s 2%
Queen Anne’s 5%
St. Mary’s 3%
Somerset 10%
Talbot 0%
Washington 5%
Wicomico 5%
Worcester 3%
Source: State Department of Assessments and Taxation; Department of Legislative Services
HB 1289/ Page 2
To qualify for the credit, a homeowner must submit an application and meet other specified
conditions. In addition to other requirements, SDAT must (1) identify homeowners who
may be eligible but have failed to apply for the credit and include related information when
sending specified assessment notices and (2) mail notices regarding potential eligibility for
the tax credit to each individual who acquires residential property within a reasonable
period of time, as specified.
Additional Comments: SDAT advises that the bill does not provide a mechanism by
which it is notified whenever a contract of a first-time homebuyer includes information
intended to make them eligible for the tax credit. The bill also eliminates a requirement for
first-time homeowners to submit an application for the tax credit. Thus, it is unclear how
SDAT is to receive and process information regarding first-time homebuyers in order to
grant the credit. Such impact has not been accounted for in this analysis.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Judiciary (Administrative Office of the Courts); Maryland
Department of Labor; State Department of Assessments and Taxation; Department of
Legislative Services
Fiscal Note History: First Reader - February 28, 2021
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Analysis by: Donavan A. Ham Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 1289/ Page 3


Statutes affected:
Text - First - Homestead Property Tax Credit - Notice Requirements and Application Waiver for First-Time Homebuyers: 10-711 Tax Property, 9-105 Tax Property, 9-105 Tax Property, 9-105 Tax Property, 8-401 Tax Property, 10-711 Tax Property