HOUSE BILL 1255
By: Delegate Ivey
Introduced and read first time: February 8, 2021
Assigned to: Ways and Means
A BILL ENTITLED
1 AN ACT concerning
2 Homestead and Homeowners’ Property Tax Credits – Access and Eligibility
3 FOR the purpose of requiring a contract for the sale of residential property to an individual
4 who intends to occupy the property as the individual’s principal residence to include
5 a certain addendum concerning the homestead property tax credit; altering the
6 individuals to whom the State Department of Assessments and Taxation is required
7 to mail a certain notice concerning the homestead property tax credit; requiring the
8 Department to design a certain document concerning the homestead property tax
9 credit for inclusion in certain contracts for sale of residential property; requiring the
10 document to include certain information; requiring the Department to make the
11 document available on its website in a certain manner; altering a certain statement
12 required to be included in a certain insert accompanying a certain notice sent to
13 property owners with unpaid property taxes; altering the definition of “gross income”
14 for purposes of determining eligibility for and the computation of the homeowners’
15 property tax credit; altering the minimum age at which a homeowner becomes
16 eligible to receive the homeowners’ property tax credit for certain previous taxable
17 years; requiring the Department to contract with a usability consultant on or before
18 a certain date to review all the public informational materials and forms produced
19 by the Department concerning the homestead and homeowners tax credits; requiring
20 the consultant to make certain recommendations to the Department on or before a
21 certain date regarding ways the Department’s public informational materials and
22 forms concerning the homestead and homeowners’ property tax credits could be
23 made more usable; requiring the Department to submit a certain report to certain
24 committees of the General Assembly on or before a certain date; providing for the
25 application of certain provisions of this Act; and generally relating to the homestead
26 and homeowners’ property tax credits.
27 BY adding to
28 Article – Real Property
29 Section 14–117(n)
30 Annotated Code of Maryland
EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
2 HOUSE BILL 1255
1 (2015 Replacement Volume and 2020 Supplement)
2 BY repealing and reenacting, without amendments,
3 Article – Tax – Property
4 Section 9–104(a)(1) and (3), (f), (g), and (j)(1)
5 Annotated Code of Maryland
6 (2019 Replacement Volume and 2020 Supplement)
7 BY repealing and reenacting, with amendments,
8 Article – Tax – Property
9 Section 9–104(a)(8) and (u), 9–105(f), and 14–812(b)(6)
10 Annotated Code of Maryland
11 (2019 Replacement Volume and 2020 Supplement)
12 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
13 That the Laws of Maryland read as follows:
14 Article – Real Property
16 (N) A CONTRACT FOR THE SALE OF RESIDENTIAL PROPERTY TO AN
17 INDIVIDUAL WHO INTENDS TO OCCUPY THE PROPERTY AS THE INDIVIDUAL’S
18 PRINCIPAL RESIDENCE SHALL INCLUDE THE ADDENDUM CONCERNING THE
19 HOMESTEAD PROPERTY TAX CREDIT THAT IS DESIGNED BY THE STATE
20 DEPARTMENT OF ASSESSMENTS AND TAXATION UNDER § 9–105(F)(5) OF THE
21 TAX – PROPERTY ARTICLE.
22 Article – Tax – Property
24 (f) (1) The Department shall give notice of the possible property tax credit
25 under this section.
26 (2) In addition to any other notice the Department provides under this
27 subsection, the Department shall:
28 (i) identify homeowners who may be eligible but have failed to apply
29 for the property tax credit under this section; and
30 (ii) include a separate insert with each assessment notice sent under
31 § 8–401 of this article to each homeowner identified under item (i) of this paragraph that
32 informs the homeowner that the homeowner may be eligible for the property tax credit
33 under this section and how to apply for the credit.
HOUSE BILL 1255 3
1 (3) In addition to any other notice the Department provides under this
2 subsection, the Department shall mail a notice to each individual who acquires residential
3 real property AND HAS NOT APPLIED FOR THE CREDIT UNDER THIS SECTION within a
4 reasonable period of time after the individual:
5 (i) acquires the property by recorded deed; and
6 (ii) indicates that the property will be the individual’s principal
7 residence on the corresponding land instrument intake sheet described under § 3–104 of
8 the Real Property Article.
9 (4) The notice required under paragraph (3) of this subsection shall:
10 (i) inform the individual that the individual may be eligible for the
11 property tax credit under this section;
12 (ii) contain information on how to apply for the credit; and
13 (iii) inform the individual that the individual may apply to the
14 Department to have the date of the deed accepted as the date of transfer of the property for
15 purposes of the credit as provided in subsection (d)(5) of this section.
16 (5) (I) THE DEPARTMENT SHALL DESIGN A ONE–PAGE DOCUMENT
17 CONCERNING THE CREDIT UNDER THIS SECTION FOR INCLUSION AS AN ADDENDUM
18 TO A CONTRACT FOR THE SALE OF RESIDENTIAL REAL PROPERTY TO AN INDIVIDUAL
19 WHO INTENDS TO OCCUPY THE PROPERTY AS THE INDIVIDUAL’S PRINCIPAL
20 RESIDENCE IN ACCORDANCE WITH § 14–117(N) OF THE REAL PROPERTY ARTICLE.
21 (II) THE DOCUMENT UNDER THIS PARAGRAPH SHALL INCLUDE:
THE FOLLOWING STATEMENT IN CONSPICUOUS TYPE:
23 “IF YOU PLAN TO LIVE IN THIS HOME AS YOUR PRINCIPAL RESIDENCE, YOU MAY
24 QUALIFY FOR THE HOMESTEAD PROPERTY TAX CREDIT. THE HOMESTEAD
25 PROPERTY TAX CREDIT MAY SIGNIFICANTLY REDUCE THE AMOUNT OF PROPERTY
26 TAXES YOU OWE.”;
27 2. INSTRUCTIONS ON HOW TO APPLY FOR THE CREDIT
28 ONLINE; AND
A COMPLETE APPLICATION FOR THE CREDIT AND
30 INSTRUCTIONS ON HOW TO SUBMIT THE PAPER APPLICATION TO THE DEPARTMENT.
31 (III) THE DEPARTMENT SHALL MAKE THE DOCUMENT UNDER
32 THIS PARAGRAPH AVAILABLE ON ITS WEBSITE WHERE IT MAY BE EASILY ACCESSED
33 BY REAL ESTATE BROKERS OR OTHER PERSONS PREPARING CONTRACTS FOR THE
4 HOUSE BILL 1255
1 SALE OF RESIDENTIAL REAL PROPERTY.
2 [(5)] (6) The Department shall ensure that the information it provides
3 under this subsection is accurate and up–to–date.
5 (b) The mailing required under subsection (a) of this section shall include a
6 separate insert that includes the following:
7 (6) the following information concerning the homeowners’ property tax
8 credit under § 9–104 of this article:
9 (i) the statement “The homeowners’ property tax credit may
10 significantly reduce the property taxes you owe if you have limited income and assets. You
11 may be eligible for the credit at any age, but if you are  60 years old or older, you may
12 be eligible for a special benefit that may reduce the taxes you owe for the past 3 years.”;
14 (ii) the website address and telephone number of the State Tax Sale
15 Ombudsman where more information is available about the homeowners’ property tax
16 credit and how to apply;
17 SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read
18 as follows:
19 Article – Tax – Property
21 (a) (1) In this section the following words have the meanings indicated.
22 (3) “Combined income” means the combined gross income of all individuals
23 who actually reside in a dwelling except an individual who:
24 (i) is a dependent of the homeowner under § 152 of the Internal
25 Revenue Code; or
26 (ii) pays a reasonable amount for rent or room and board.
27 (8) [(i)] “Gross income” means [the total income from all sources for the
28 calendar year that immediately precedes the taxable year, whether or not the income is
29 included in the definition of gross income for federal or State tax purposes] MARYLAND
30 ADJUSTED GROSS INCOME AS CALCULATED IN ACCORDANCE WITH TITLE 10,
31 SUBTITLE 2 OF THE TAX – GENERAL ARTICLE, INCLUDING THE VALUE OF ANY
32 INCOME RECEIVED DURING PERIODS OF NONRESIDENCE NOT OTHERWISE SUBJECT
HOUSE BILL 1255 5
1 TO THE STATE INCOME TAX.
2 [(ii) “Gross income” includes:
3 1. any benefit under the Social Security Act or the Railroad
4 Retirement Act;
5 2. the aggregate of gifts over $300;
6 3. alimony;
7 4. support money;
8 5. any nontaxable strike benefit;
9 6. public assistance received in a cash grant;
10 7. a pension;
11 8. an annuity;
12 9. any unemployment insurance benefit;
13 10. any workers’ compensation benefit;
14 11. the net income received from a business, rental, or other
16 12. any withdrawal, payment, or distribution from an
17 individual retirement account;
18 13. any withdrawal, payment, or distribution from any
19 qualified retirement savings plan; and
20 14. any rent on the dwelling, including the rent from a room
21 or apartment.
22 (iii) “Gross income” does not include:
23 1. any income tax refund received from the State or federal
24 government; or
25 2. any loss from business, rental, or other endeavor.]
26 (f) A homeowner who meets the requirements of this section shall be granted the
27 property tax credit under this section against the property tax imposed on the real property
28 of the dwelling.
6 HOUSE BILL 1255
1 (g) (1) Except as provided in subsection (h) of this section, the property tax
2 credit under this section is the total real property tax of a dwelling, less the percentage of
3 the combined income of the homeowner that is described in paragraph (2) of this subsection.
4 (2) The percentage is:
5 (i) 0% of the 1st $8,000 of combined income;
6 (ii) 4% of the next $4,000 of combined income;
7 (iii) 6.5% of the next $4,000 of combined income; and
8 (iv) 9% of the combined income over $16,000.
9 (j) (1) A property tax credit under this section may not be granted to a
10 homeowner whose combined net worth exceeds $200,000 as of December 31 of the calendar
11 year that precedes the year in which the homeowner applies for the property tax credit or
12 whose combined gross income exceeds $60,000 in that same calendar year.
13 (u) (1) Under the conditions set forth in this subsection, the Department may
14 accept an application from a homeowner within 3 years after April 15 of the taxable year
15 for which a credit is sought, if the homeowner:
16 (i) is at least  60 years old as of the taxable year for which a
17 credit is sought; and
18 (ii) was eligible for the credit under this section for the taxable year
19 for which the credit is sought.
20 (2) A homeowner may apply to the Department for a property tax credit
21 under this section by filing an application on the form that the Department provides.
22 (3) The homeowner shall state under oath that the facts in the application
23 are true.
24 (4) To substantiate the application, the Department may require the
25 homeowner to provide a copy of an income tax return, or other evidence detailing gross
26 income or net worth.
27 (5) On certification by the Department, the Comptroller shall pay to the
28 homeowner the property tax credit due under this section.
29 SECTION 3. AND BE IT FURTHER ENACTED, That:
30 (a) On or before August 1, 2021, the State Department of Assessments and
31 Taxation shall contract with a usability consultant to review all the public informational
HOUSE BILL 1255 7
1 materials and forms produced by the Department concerning the homestead and
2 homeowners tax credits.
3 (b) (1) On or before December 1, 2021, the consultant shall make
4 recommendations to the Department regarding ways the Department’s public
5 informational materials and forms concerning the homestead and homeowners’ property
6 tax credits could be made more usable, especially for socioeconomically diverse
8 (2) The consultant shall make specific recommendations concerning:
9 (i) how the Department’s website and other written materials could
10 more clearly and effectively communicate information concerning the tax credits, including
11 why it is important and beneficial for homeowners to apply;
12 (ii) how to simplify and clarify the applications for the credits and
13 minimize errors by individuals completing the applications; and
14 (iii) the design of the document required under § 9–105(f)(5) of the
15 Tax – Property Article as enacted by this Act.
16 (c) On or before February 1, 2021, the Department shall submit a report, in
17 accordance with § 2–1257 of the State Government Article, to the Senate Budget and
18 Taxation Committee and the House Committee on Ways and Means that includes:
19 (1) the recommendations submitted by the consultant under subsection (b)
20 of this section; and
21 (2) the actions the Department has taken or plans to take to implement the
23 SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect June
24 1, 2021. Section 2 of this Act shall be applicable to all taxable years beginning after June
25 30, 2021.Statutes affected:
Text - First - Homestead and Homeowners' Property Tax Credits - Access and Eligibility: 14-117 Real Property, 9-105 Tax Property, 8-401 Tax Property, 14-812 Tax Property, 9-104 Tax Property