New chance to get Baltimore new-construction tax credit
Long before there was an $8,000 income tax credit for new buyers, there was Baltimore's property tax credit for newly constructed homes. It makes a real bottom-line difference for buyers, who get their property tax bills phased in. First year, half off. The amount due rises to 60 percent the second year, 70 percent the third, and so forth, which means it's not until year six that someone with the credit is paying the full amount.
Unless the new buyer didn't apply for the credit within 90 days of purchase.
You can imagine how some residents felt when they found out -- too late -- that they had been eligible for a substantial discount on property taxes in the jurisdiction with the state's highest rate.
Now you folks have a second chance.
The City Council has just passed a bill, signed into law Tuesday by Mayor Sheila Dixon, that offers a "one-time amnesty period." It's for people who would have been eligible in 2005 or later had they met the original application deadline. (There's a gray area there, thanks to the law's use of the word "eligible": Certainly you would have been eligible if you bought Jan. 1, 2005. But you also would have been eligible if you bought in the 90 days before that date.)
If you apply, keep in mind that you'll get your normal tax bill in July. If you're approved for the credit, you'll get a new, revised notice in the mail.
Thanks to Wonk reader Matt Gonter for noticing this law change was in the works.
Other notable things about the revamp:
--It gives buyers two windows to apply, either within 90 days of settling on the home or within 90 days after receiving the first assessment notice.
--It extends the life of the credit program. The program was set to expire at the end of the month, meaning no new applicants. City leaders pushed that back to June 30, 2014.Like the homestead credit, this tax break is only for owner-occupants. Though the credit refers to "newly constructed dwellings," you might also be able to get the credit if you bought a "substantially rehabbed" home that was previously cited by the city as vacant and abandoned.